The Israel Securities Authority is going to set up a fintech innovation hub, according to an official press release. The aim of the initiative is to create a connection between the authorities and businesses involved in this field.
Hundreds of businesses
Israel alone now counts hundreds of businesses working in this field, and the market is worth tens of billions of dollars a year. Given this, ISA Chairwoman Ana Guette said that the ISA understands the importance of expanding the authorities’ understanding of the field.
The regulator wants to be able to adjust laws without causing unnecessary obstacles to development. To this end, fintech businesses are encouraged to adapt their activities to the law – they will receive support from the ISA to achieve this.
Commenting in the press release, Guetta said: “The establishment of the Innovation Hub for the field of fintech is in line with the Authority’s vision to develop financial services for the investing public in Israel. A real revolution is taking place in many areas, which is changing the way consumer services are used by customers around the world. The Securities Authority strives to lead innovation in general and in the field of fintech in particular, out of an understanding of its contribution to the investing public, the resilience of the capital market, growth and the Israeli economy, with a vision of the future.”
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Tokens are securities, coins are not
Earlier this year, the ISA set up a committee of lawyers and consultants to examine the possibility of a sandbox for ICOs. It focused on two different models – the American approach, which treats tokens as securities, and the Swiss model, which recognises that tokens can fall into three different categories.
The ISA released the conclusions reached by the committee in March. In its report it suggested legal definitions of tokens. It decided that cryptocurrencies that are designed to be used solely as currency should not be considered securities, but cryptocurrencies which grant rights similar to shares should take on this definition.
The agency thus differentiated between coin and token. It further said that each cryptocurrency should be judged on its individual characteristics.
The examination was seen as a positive development because the previous chairman of the ISA, Shmuel Hauser, had been relatively suspicious of the industry. His attitude was a result of his experience with the binary options industry.