Israeli Financial Authority Sets Up Blockchain Unit to Look Over Business Permit Applications
Israeli crypto scenario has not yet settled. Although the country is trying its best attempts in supporting the blockchain companies and FinTech companies, still the attempts are failing to reach the crypt traders in the country. The banking system is pulling the feet back of any progress made in this field.
Fast-track business permit-
As per sources, the regulating authority- ‘Capital Market, Insurance and Savings Authority’ which is affiliated with the Ministry of Finance, is aiming to look into 2000 ‘business permit applications’ in the coming times. The authority has set up a blockchain unit for the same. The main focus point of the regulating authority will be to deal with the blockchain and FinTech application first. To make the process more efficient, the authority has contacted several blockchain industry representatives so that it can work out which applications are worthy and which ones should be weeded out.
According to sources, the authority has optimistically announced that many companies have the potential to secure the permit and the business license to operate in the country if they are ready to weak their business models and the related technology a little bit. The authority has assured that this can happen quite quickly.
The country’s main focus over the years has been to build an encouraging environment for business development and to create regulations that help the businesses to grow. Despite such an intention, the market of the country is still quite small and highly regulated. It is a strong indication that not very many startups have chosen the country to start their businesses. Two years ago sandbox was created in the country where financial regulators and industry representatives were allowed to have an equal say in the building of the regulations for the businesses in the country.
The Capital Market, Insurance and Savings Authority is planning on to speed up the process to allow applicant companies to start working in the country. It is counting on some specific sector-oriented companies to come through this selection process. They include- ‘P2P platforms, digital wallets, blockchain-powered FinTech companies, and other payment services providers.’
The tussle of Israeli crypto traders with commercial banks-
All the above sound very constructive, yet contrastingly, the traders of the cryptocurrency of Israel are having a tough time with the main banks of the country. As per sources, a group of traders called- Israel Bitcoin Association (IBA), got so annoyed with the tussle with banks that it has submitted a ‘freedom of information petition to the district court in Jerusalem.’ In the petition, the IBA group has elaborated on the challenges they are facing, and have straight away blamed the central banks of the country of withholding the ‘commercial secrets’ regarding the crypto policies.
These crypto traders and investors are struggling to find a friendly bank which is flexible and understanding. The main issue these crypto traders are facing is the denial from the central banks to accept any business model which has crypto involved. The moment the bank gets to know that the money for the deposit is coming from cryptos such as Bitcoin (BTC) or any other altcoins trading, they close the door for such clients or traders. This situation has put such traders in the hot soup with the potential trouble with taxing.
The Israel Bitcoin Association (IBA) demands transparency-
This has naturally demanded the commercial banks to come out in the broad stage and explain the policies in detail instead of giving a flat denial for such crypto-based or linked businesses. As of now, the bank policies are quite vague and putting such traders into serious trouble. Therefore, now the commercial banks are expected to submit a report about the refusal for not allowing any customer trade. This report is mandatory as per Israeli law and is to be submitted to the Bank of Israel.
The Israel Bitcoin Association (IBA) has further requested the Bank of Israel to make such refusal reports to be made public. Alternatively, they have requested for a detailed explanation on the crypto policy of the country. No response has been given to this request by far. The IBA, on the other hand, is raising funds to sue the banks that have denied customer trade.
It seems like IBA’s demands are fair and deserve attention. Otherwise, it will be quite a contradiction for the country to promote crypto businesses on one hand, and to give crypto traders such a hard time, on the other.