The Tel Aviv Stock Exchange (TASE) is seeking approval to permit crypto trading on its platform. This move comes after Israeli banks such as Bank Leumi agreed to provide crypto trading services in partnership with Paxos late last year. The draft for public comments published Monday, February 27 looks to expand the list of activities allowed for Non-Banking Members (NBMs) to include cryptocurrency trading.
Regulation Is Essential
The cryptocurrency market has gone through tumultuous times in the past year, with a significant number of changes resulting from increased regulations and restrictions imposed by various organizations.
The rapid expansion of the cryptocurrency industry and the increasing number of customers have highlighted the need for proper regulation of these activities in order to minimize the various risks associated with crypto trading (operational, legal and cyber).
Proposed Framework
The proposed system will enable customers to deposit funds (in fiat currency) to be used for crypto investments and withdrawals from these currencies.
The NBM will provide two services – the first, a licensed provider of a crypto trading platform, and the second, a custodian of crypto assets.
The NBM will be responsible for executing customers’ orders, transferring funds to the crypto trading platform and the custodian. Besides, they will also need to handle the collection of profits or losses.
The Tel Aviv Stock Exchange (TASE) is looking to expand its services to include cryptocurrency trading. In a press release, the TASE announced that it had submitted an application for a license from the Bank of Israel for two services: the first, a licensed provider
The TASE is currently exploring the potential of a regulated trading platform for digital assets. According to a report from the Chief Economist of the Ministry of Finance, regulation of financial activities or services involving virtual assets should be similar to existing regulations for non-digital assets.
The license application would enable customers to deposit funds in traditional currencies, such as the Israeli Shekel, and use them to purchase cryptocurrency. The provider of trading services would then execute the purchase and record it in the customer’s account with the Bank of Israel. When the customer wishes to sell crypto, the provider would sell the coins, credit the Bank of Israel’s omnibus account, and transfer the proceeds to the customer’s account.
The TASE is continuing to assess the potential of its cryptocurrency trading services to ensure that its customers will have access to a safe and secure trading platform.