Financial Services Law was postponed for 4 months

The Finance Committee approved a four-month postponement at the start of the Control of Financial Services Law, which for the first time regulates the entire world of financial services, including non-bank credit, payment, conversion and clearing services, social platforms for intermediation of loans between borrowers and borrowers, Peer to Peer etc. This legislative framework is of great importance in shaping a competitive, sophisticated and supervised financial services market, which is in fact an appropriate alternative to the financial services currently provided by the traditional banking and institutional system, which is characterized by high concentration and high pricing due to limited competition .

In accordance with the Supervision Law, these financial entities are required to operate only under the license of the Capital Market Authority, whose acceptance is subject to compliance with many conditions, such as minimum shareholders' equity, appointment of officers, All in order to create a reliable, safe and stable market that will enable the public to protect against negative phenomena such as fraud, activity under the cover of criminal and insolvency factors, while applying fair, transparent and effective monitoring mechanisms.

The postponement in four months stems from the legal need to complete the formulation of the Prohibition of Money Laundering and Terrorism Financing Order by the Prohibition of Money Laundering Authority, which completes the regulatory framework required for the activity of the financial entities. Last week, a preliminary draft of the Prohibition on Money Laundering and Financing of Terrorism Order was published in connection with service providers in a financial asset, including in the area of ​​cryptographic currencies, such as Bitcoin. According to the draft order that is being formulated, financial service providers will be required to implement procedures, controls and procedures that will assist in the international fight against money laundering and the financing of terror, with an emphasis on rules for identifying and verifying customers and monitoring various financial activities. In the world of digital currencies, this is a real revolution that should be welcomed, and which is consistent with the huge advantages of blockkin technology. As a distributed database that includes a digital record of user accounts and financial transactions, the BlockKine enables everyone to gather information and track all the financial transactions that go through it. For the purpose of preventing money laundering and the financing of terror, there is a clear preference for the use of Bitcoin over cash. Moreover, recent studies have shown that less than 1% of Bitcoin transactions are used for illegal transactions.

The implementation of the Financial Services Supervision Law and the Money Laundering Prohibition Order will place Israel at the top of the global financial technology pyramid. However, the regulatory work has not yet been completed. These financial institutions find it difficult to open and manage bank accounts that are necessary for their activity. Now, it is required that the Supervisor of Banks instruct the commercial banks to clearly stop and bind financial institutions and allow them to properly manage their bank accounts. Otherwise, we will find ourselves dumping the baby with the water and killing the competition, which has just begun to raise its head, and seriously harm the Israeli pining industry, which is at the forefront of the world.