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Israel has become the latest country to move towards adopting crypto regulations. On Thursday, the European country announced its intention to adopt laws targeted at the fintech and crypto sectors to foster development and protect innovations.
The Israel Securities Authority Chair Ms. Anat Guetta disclosed to the media that it would partner with experts in the finance technology space to enforce laws on the nascent crypto and fintech sectors. While speaking to Coindesk on Monday, the former banker admitted the massive potentials of blockchain, adding that it can positively change the outcome of the capital markets.
Israel Targets Regulating Crypto Long-Term
Although blockchain technology is intertwined with cryptocurrency because blockchain is the framework on which digital assets are built, Ms. Anat Guetta sees them as two different phenomena. He sees potential in the technology but has some reserves for cryptocurrency.
Ms. Guetta said the ISA is still examining crypto activities and looking at possible ways to regulate it as it should be without affecting the growth of the sector. When asked about overseeing blockchain technology, Guetta thinks that regulators are not well knowledgeable about the technology, explaining the duty of the ISA as a monitoring and regulatory unit.
Guetta Suggests the Way Forward for Regulators
In 2020, the ISA head said that digital assets are part of a blockchain, an essential technology that will drive financial innovation. First, regulators have to acknowledge the technology and communicate in a language understandable by developers.
Israel became one of the first few countries worldwide to adopt Distributed Ledger Technology in its fundamental systems, but there’s still a lack of regulatory oversight. In her opinion, the nation needs clear regulations on what’s allowed and what isn’t. She hinted that blockchain firms fancy the idea of operating out the Israeli jurisdiction, causing the state to lose revenue.
However, the rationale isn’t different in other countries that blockchain firms operate in. For the industry to thrive, Guetta suggests the implementation of a coherent framework to enable entities to function legitimately. Israel is setting its sights to make this happen.
Some countries are adopting a regulatory strategy that classifies virtual currencies into various asset classes. According to Guetta, this method is cumbersome. She thinks that regulatory bodies should supervise cryptocurrency as a whole.
Many countries have been navigating towards overseeing the crypto industry and fintech sector since 2020. Last year, Russia, Cyprus, Singapore, South Korea, and several other countries adopted some regulations to protect the industry and the investors. China placed a blanket ban on cryptocurrency but welcomed blockchain technology as a primary driver for innovation.
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