Israeli Securities Authority Issues A Request For Information To Stimulate Blockchain Innovations
The Israeli Securities Authority (ISA) has published a Request For Information to recognize potential regulations that restrict the growth of blockchain-based ventures in the country on Jan 20. Besides, the regulator attempts to find out the functional applications of Distributed Ledger Technology (DLT).
Essentially Israel’s financial watchdog, the ISA, established a committee to support the development of the blockchain industry in the country. The regulator concentrated on platforms that issue and deal blockchain-based securities and their properties, including the use of smart contracts and tokens.
This initiative develops from the work of an earlier committee that examined the risks posed by ICO’s in early 2019. At the time, they identified the need for regulatory adjustments to create proper infrastructure for security tokens.
The regulator highlighted that DLT “has the potential to promote the Israeli capital market.”
Precisely, it may decrease trading costs and systemic uncertainties to the economy, in enhancement to better access to capital markets for Small-Medium Enterprises (SME).
The committee did not recognize significant perils to blockchain technology, surpassing the general cautiousness sanctioned for any new technology. As long as the explicit platform satisfies regulatory aims such as anti-money laundering and financial stability, the regulator has stated it will manage a technology-neutral approach.
At the same time, the ISA displayed an interest in studying practical applications of blockchain technology. It remarked that most of the advantages associated with DLT “are, for the most part theoretical,” principally due to their early stage of adoption.
The regulator professed several questions to the people to promote blockchain’s regulatory standing in the country. Advancement of capital markets is a primary concern, with the ISA immediately asking for provisions that “impede the development of a digital market in Israel.”
The committee also requested information on additional risks and used cases particular to the trading of DLT-based securities.
The ISA also summoned entrepreneurs to grant proofs of concept of features that would facilitate the development of digital exchanges in the legal documentation, spheres of custody, and others.
The action appears to be an endeavor to streamline the evolution of blockchain startups, particularly exchanges. Notwithstanding impressive recording growth in the sector, the Israeli government is often criticized for inhibiting innovation in the country.