Commercial Banks in Israel Asks Central Banks for Guidelines

There are many things that make cryptocurrencies a great thing. It has the ability to get rid of third parties mainly because of blockchain technology. In addition to this, there are countries such as Venezuela wherein people have relied on cryptocurrencies instead of their local currency mainly because of hyperinflation.

However, the lack of regulatory clarity has been a constant problem that the entire crypto industry witnessed this 2018. And it has been seen as a problem why many institutional investors are still waiting before they get involved.

Asking Israel Central Bank for Guidelines

The Association of Banks in Israel is now asking the Israel central bank to provide clear guidelines on how exactly to deal with crypto activity and cryptocurrency accounts. The latter was signed by the association’s CEO Moshe Pearl.

The letter by Israel’s commercial banks asks for guidelines exactly how to administer the new accounts that are involved in crypto-related activities. This includes clients participating in ICO and the purchase of cryptocurrencies.

One of the main concerns of commercial banks is how exactly to handle deposits that are declared as earnings from cryptocurrencies. The banks rely on the provisions part of the country’s anti-money laundering law rejecting large deposits that don’t have verifiable sources. In early May, Hapoalim which is Israel’s largest bank agreed to take $200,000 in Bitcoin earnings right after the recommendation of the Tel Aviv District Court.  This incident is viewed by many as a legal precedent.

The banks expressed their concern regarding the reality that regulators are still yet to provide clear guidelines when it comes to cryptocurrencies. And it also becomes difficult for banks to perform due diligence.

New Law Pushed Back to a Later Date

There was a report wherein Israel’s parliamentary finance committee decided to push back the start date that can provide a new law to regulate crypto-related businesses. It was originally intended to be in effect on June 1 but the law was then deferred to October 1. On May 23, Israel Money Laundering and Terror Financing Prohibition Authority has provided a draft of what could be a law that tackles the crypto-related money laundering activities.

Unified Regulations?

Japan is also pushing towards unified crypto regulations. In fact, Japan started by implementing stricter rules when it comes to the operation of crypto exchanges in the country after a hacking incident. And now, Japan regulators have been working with major economies in order to come up with unified crypto regulations. Monero, Zcash, and Dash are also some of the cryptocurrencies that they are looking to eliminate mainly because of the extra anonymity that it offers its users.

And also, there are also businesses such as Coinbase that is now working along with regulators in order to make their operations smoother. Coinbase has been able to get a license from the US Securities and Exchange Commission.

It is true that cryptocurrencies can be used for illegal activities. And so far, it has also been proven that regulatory clarity has been needed by the industry in order for businesses to ensure that their venture is safe from regulators.