The Tel Aviv Stock Exchange has published a proposal to allow non-banking members (NBMs) to safely offer their customers bitcoin (BTC) and altcoins trading services.
To make it easier for non-bank institutions based in Israel and registered under its umbrella to offer their customers digital assets trading services in a secure and regulatory-compliant way, the Tel Aviv stock exchange has published a draft proposal to expand the authorized activities of these firms.
Per a press release by the 70-year-old exchange, the turmoils experienced by the global crypto space in the past year, such as several high-profile bankruptcies, have further highlighted the need for more industry regulation to help consumers mitigate risks.
Under TASE’s new proposal, NBMs will be licensed as crypto trading and custody service providers, enabling customers to deposit funds into designated accounts associated with the NBMs for crypto trading activities.
The proposal explains that crypto trading will function similarly to fiat: customers deposit funds to non-banking members’ accounts. The transaction will be recorded in the user’s profile when the operation is processed and cryptocurrency is received.
The proposal is now open for public comment. It will then be forwarded to the TASE Board of Directors for approval.
Crypto regulation in Israel
While Israeli-based entities have continued to explore the potentials of blockchain technology over the years, the country’s Web3 space is yet welcome amenable and clear regulations that would attract market participants.
As reported by crypto.news last November, Shira Greenberg, Israel’s chief economist, submitted a 109-page report to the country’s Finance Minister, outlining the steps to create a robust crypto regulatory framework.
Similarly, in January, the Israeli Securities Authority (ISA) formulated a draft bill to bring digital assets under the country’s existing securities laws to foster consumer protection.
The proposed regulation by TASE is expected to bring more robust financial controls and help NBMs offering crypto services to segregate customer funds from their operating monies, effectively nipping illicit practices such as fund misappropriations in the bud.