Israel’s market regulator, the Israel Securities Authority is planning to allow cryptocurrency trading and security token offerings (STOs) flourish under their enhanced regulation as the country is looking forward for more innovative ways to raise capital.
Israel’s Securities regulator has recently recommended to create a platform to trade cryptocurrencies, which would allow firms to raise money by issuing digital tokens to investors. The recommendation came after the committee set up by Israel Securities Authority (ISA) studied the sector for nearly two years.
Anat Guetta, who was appointed ISA chair in January last year believes that blockchain, the technology that underpins digital assets is valuable although the hype that surrounded the field in the past few years has subsided. “The excitement that defined the field in 2017 has cooled off, but the technology is here to stay,” said Guetta.
Most importantly, the number of companies traded and the amount of money raised in Tel Aviv (Israel’s only public stock exchange) has fallen from a decade. The govt. and ISA have been looking for better ways to attract new investors and boost initial public offerings. Guetta added that technological innovation can streamline and increase competition in the capital market. The real challenge lies in to find the balance with protecting investors. While establishing a new trading platform, the committee also suggested to apply securities law to cryptocurrencies, which would need to be tweaked to include unique disclosure demands for companies who are looking to issue digital tokens.
The committee did not say anything about when it expects to give the final decision. But at the same time it highlighted that other exchanges in London and Australia are considering similar options.