The Tel Aviv Stock Exchange (TASE) has created a groundbreaking move towards offering crypto trading, marking the first time it has proposed allowing its clients to trade digital assets. The stock exchange has published a draft to approve expanding crypto trading activities to non-banking members, which is open for public comments. The proposal will enable customers to deposit fiat money specifically for investments in digital assets.
If approved, non-banking members will be licensed providers for crypto trading and custodial services. The customer funds will be placed in an “omnibus account” as an intermediary for crypto trading activities. The proposal will also allow clients to withdraw funds originating from the sale of crypto. However, the process for doing so is convoluted, a measure taken to mitigate risks and enhance consumer protection.
“This move by the Tel Aviv Stock Exchange to expand its crypto trading activities to non-banking members is aimed at promoting innovation and competition while safeguarding customers and mitigating risks. It marks a significant development in advancing the Israeli capital market.” said the TASE.
Following the submission of comments, the TASE Board of Directors will review and consider the proposal for approval. Nonetheless, no exact time has been provided.
Although the TASE’s announcement appears optimistic, the regulatory landscape in Israel has not been so positive. A proposed law in the country plans to classify crypto assets as securities, which could severely impact the crypto industry. In January, the Israeli Securities Authority (ISA) presented a blueprint to regulate digital assets by including them under the category of securities. According to Ilan Sterk, CEO of the Israeli crypto trading firm Altshuler Shaham Horizon, the reclassification is causing impact on the crypto industry. Sterk told Cointelegraph that “everything is changing here” and expressed concern that the new law could potentially harm the industry.
Despite the challenges, the TASE believes that aligning local and international regulations will attract more investments from foreign.
The announcement from the TASE represents a significant move for the Israeli market and an opportunity for the country to compete with other nations’ stock exchanges that already offer crypto trading.
Crypto trading has been popular recently, with many retail and institutional investors seeking to invest in digital assets. Several traditional financial institutions, including Goldman Sachs and JP Morgan, have started offering crypto trading services to their clients.
As crypto trading continues to gain popularity, more traditional financial institutions and stock exchanges may follow the TASE’s lead and allow their clients to trade digital assets. However, regulatory hurdles remain a significant challenge for the sector, and as we’ve seen in Israel, regulations can change quickly, potentially causing significant disruption to the industry.
