The Israeli Capital Market Authority is seeking to make changes to its licensing regime in order to encourage competition and grow the financial technology (fintech) industry in the country. According to a report by local daily Calcalist, the regulator has established dedicated teams that will specialize in blockchain and other emerging financial technology.
Currently, the regulator has received over 2,000 applications from startups in the country. However, the authority intends to prioritize blockchain and financial technology.
The watchdog has previously engaged in attempts to advance the fintech industry in the Middle Eastern country. In 2017, the authority started working on a regulatory sandbox to enable fintech startups to operate under relaxed regulations and to fast-track their licensing process. However, the initiative hit a snag and has been inactive for over a year as most companies don’t see Israel as a viable market due to its restrictive regulatory regime.
Dr. Moshe Barkat, the head of the authority stated, “Business and technological innovation and the relationship with the industry are the basic principles that guide the Authority in its operations. The Authority is engaged in the licensing and regulation of fintech companies on a regular basis, including digital insurance companies, P2P platforms and credit providers, digital wallets, Blockchain-based fintech ventures and other payment services providers.”
The authority has also joined the Global Financial Innovation Network (GFIN), an international body that promotes financial innovation. The network aims to establish a controlled framework for sharing practical knowledge between the leading global regulators. Recently, the authority was the only Israeli representative at a round table organized by the IMF on fintech and cryptocurrencies.
While the country’s regulators have sought to enable crypto innovations, crypto companies have still struggled to find banking services. In June, the Israeli Supreme Court ruled in favor of local crypto exchange Bits of Gold in its feud with its bank, Bank Leumi. The bank had denied service to the exchange after accusing it of being a gambling venture. Under the Israeli banking laws, banks shouldn’t deal with gambling firms.
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