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Israel Establishes Interagency Team for Coordinating Regulation of Virtual Assets

(Dec. 28, 2018) Israel’s central bank, the Bank of Israel, announced on December 18, 2018, the establishment of an interagency team for regulatory coordination in the area of virtual assets. In the view of the Israeli financial system’s regulators, cooperation is necessary because of Israeli industrial developments based on distributed ledger technology (DLT) uses and applications, among other things. (Press Release, Bank of Israel, Public Announcement Requesting Receipt of Information: Interagency Team for Regulatory Coordination Regarding Virtual Assets (Dec. 18, 2018), Bank of Israel website (in Hebrew).)

The team is composed of representatives of the following agencies: the Capital Market Authority, Securities Authority, Ministry of Finance, National Economic Council, Tax Authority, Ministry of Justice, Prohibition of Money Laundering and Terrorism Financing Authority, National Cyber System, and Bank of Israel. (Id.)

The team plans to follow Israeli and international developments concerning virtual technology. It will examine the impact of regulating various types of technology on economic activity, financial markets, and financial stability. In addition, the team will collect data for the creation of an information source to enable the formulation of recommendations for regulatory policy. The data will be accessible to the regulators and the public. (Id.)

The announcement calls on the public to identify issues and propose measures for resolving challenges, especially in connection with the following:

  1. The main barriers faced by persons dealing with virtual assets in Israel, including those connected with investing in and financing virtual assets
  2. Risks associated with using virtual assets and engaging in related activities
  3. Opportunities presented by the technology for the financial sector
  4. Ways in which the technology may assist in meeting challenges related to the prevention of money laundering and financing of terrorism

The Bank has called for public responses to the announcement by the end of December.