Israel is commonly thought of as being ahead of the times in terms of technology and innovation. The country has become a hub of advancement, and now they are taking further action to make Israel as blockchain friendly as possible.
A division within Israel’s Ministry of Finance called “the Capital Market, Insurance, and Saving Authority” is looking for ways to make it easier for fintech and blockchain companies to get licensed.
As the supervisor for the department said in 2018, “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.” This focused a mandate would be considered ahead of the curve compared to other countries.
As we have seen in the United States, a lack of regulatory clarity can cause price volatility and make it harder for companies to plan for the future. The goal for Israel is to foment a more competitive environment by making it simpler for companies to get started
An initial report has already shown that there are dozens of companies who could get a work permit to operate within Israel without causing too much of an interruption to their business practices.
Looking Closer At the Banks
This is all happening at the same time as the Israel Bitcoin Association is getting lots of press after filing a freedom of information petition regarding the policies of local banks. Banks currently have very opaque policies regarding how they handle money that has originated from digital currencies, and investors in Bitcoin would like to know what the exact policies are.
Refusal of transactions concerning digital currencies is a problem users have faced worldwide, and it is about time that the banks started getting pushback for that.
The legal advisor for the Bitcoin non-profit says:
“Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We therefore contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We therefore decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks.”
Interestingly enough, it seems like the origin of this movement came from the fact that Israeli banks would not let the Israel Bitcoin Association open a bank account. The Association doesn’t actually conduct any business or trading in Bitcoin, so it seems as if the name was enough to get them banned.
Another case has gained traction where a cryptocurrency investor was refused service by an Israeli bank due to the fact he had earned this money from cryptocurrency investments.
There is a natural libertarian and freedom of speech argument here where you will have investors crying out that this is a violation of their rights and they should be allowed to spend their money on whatever they want. Comically enough, these sorts of anecdotes actually feed the Bitcoin fire even more and make it more appealing to buy Bitcoin.