The Israeli Central Bank (ICB) has released a draft guidelines for crypto deposits. Instead of issuing blanket denials, banks will now be required to investigate each company individually for such deposits.
ICB announce draft regulation for crypto deposits
The central bank of Israel announced proposed regulations that might open up the country’s financial system to crypto firms by asking banks to analyse each company independently rather than applying blanket denials on crypto deposits with banks. In this regard, the draft guidelines paper was uploaded to the bank’s website on Thursday. According to the document, banking organisations must perform risk assessments and establish policies and procedures for transactions originating from or departing to cryptocurrencies. The draft guidelines for crypto deposits are currently available for public feedback, and final rules will be developed as an outcome of it.
Banks would be “required to analyse each case on its own and would not be able to issue a broad denial to the service provider” for licenced crypto companies or financial asset service providers. Banks will also be forced to reveal the source of the funds used to acquire cryptocurrency, as well as trace the channel of transit as virtual currency changes hands “from the moment of its purchase till its exchange to fiat money and depositing into a bank account.”
The proposal is also compliant with anti-money laundering (AML) legislation that went into force in November. At the time, crypto proponents in Israel hoped that AML legislation would make it easier for banks to onboard crypto consumers. To avoid the use of cryptocurrency for money laundering, regulators throughout the world are tightening AML legislation and compliance.
The European Union’s legislators are seeking to ensure that its new AML authority has strong jurisdiction over virtual currencies. Earlier this year, a number of significant financial businesses based in the United States, including Coinbase, Fidelity, and Robinhood, united together to bring digital assets in line with worldwide AML regulations.