The central bank of Israel has published draft regulations that looks to have made the country’s financial system more accommodating to crypto companies and their dealings. That is, henceforth, a blanket ban may not apply anymore and banks must treat every individual company on personal basis.
Bank of Israel to Downtune Crypto Rules
According to the draft, which was published on the bank’s official website, banking corporations do not have to outrightly ban funds that are linked to crypto. Instead, each of the banks must conduct risk assessments on their own. And then present policy and guidelines for transfers going to and from virtual assets.
Essentially, this means that banks cannot issue a blanket refusal to crypto firms, particularly those who are already licensed .
Also, banks may be required to clarify the source of money used to purchase crypto, and then track its movement. However, considering the publication, cryptocurrency is always on the move, “from the time of its purchase until its conversion to fiat currency and deposit into an account with the banking corporation.”
New Rule Would Bolster Adoption
Without a doubt and if truly achieved, the new rules would help bolster crypto adoption in the region. But as at present, the proposal is still open to the public for progressive opinions, after which final guidelines will be formulated.
Meanwhile, the draft is apparently also in line with the anti-money laundering (AML) rules that came into effect in November.
Interestingly however, the efforts of the Bank of Israel comes at a time when global regulators are doing similarly. And with AML regulations effort already in top gear globally, achieving compliance can help to prevent using crypto for money laundering.
Finally, European lawmakers are also currently working to ensure its new AML has a very strict oversight into virtual assets.
Also recall that in early 2022, many firms came together to bring digital assets in compliance with global AML rules. They include; Coinbase, Robinhood, and Fidelity and many other influential firms.