The Israeli financial regulator is reorganizing its licensing regime for fintech and blockchain companies to stimulate the development of the industry.
The Israeli capital market administration plans to change the distribution of licenses in Israel. About 2,000 fintech and blockchain companies are currently awaiting a license from a state regulator. Due to high demand, the Office will introduce an accelerated licensing regime. The program aims to create small industry management teams to review incoming applications.
“Business and technological innovation, as well as relations with the industry, are the main principles that guide the agency in its activities,” said Moshe Barkat, head of the department. “The department regularly licenses and regulates fintech companies, including digital insurance companies, P2P platforms, loan providers, digital wallets, blockchain-based fintech enterprises and other payment service providers.”
The Office is also reviewing its current standards regarding insurance for fintech companies. These regulator steps are part of a more active effort by the Israeli Ministry of Finance to promote financial innovation. For example, the regulator recently joined the Global Financial Innovation Network (GFIN). The World Bank and the International Monetary Fund are also participating in this initiative.
The efforts of the Ministry of Finance to regulate fintech and blockchain are contrary to the policies of local banks, which cryptocurrency investors suffer from. Earlier this month, it was reported that cryptocurrency investors in Israel were unable to pay taxes due to banks refusing to open accounts for them.