The Banking Supervision Department at the Bank of Israel has presented for public discussion a draft reform regulating the procedure for crediting fiat funds obtained from operations with digital assets. The proposed changes are intended to simplify the integration of cryptocurrency income into the traditional financial system and eliminate the strict bureaucratic barriers that investors face.
Abolition of Total Transaction Audits
The main innovation of the document is the abolition of the requirement for a total audit of the origin of funds. Financial organizations plan to exempt themselves from the obligation to automatically track the entire digital path of transactions for clients whose annual deposit volume exceeds 100,000 shekels. According to the new regulation, if digital assets have already been exchanged for traditional currency (for example, shekels or dollars) and passed through regulated bank accounts, commercial banks are no longer required to track their historical route in detail.
Ban on Automatic Blocking
The regulator is introducing a strict veto on preventive service denials. The draft instructions explicitly state that banking structures no longer have the right to refuse clients in processing payments or opening accounts solely on the basis that the source of their financial activity is linked to the sphere of virtual currencies.
Risk-Based Approach
Instead of total bans, commercial banks are instructed to classify transactions by their level of safety. Operations coming through crypto platforms with a license from the Israel Securities Authority or regulators of other reliable countries will be recognized as low-risk. In such cases, the bank is permitted to completely refrain from checking the route of digital coins.
At the same time, transfers from anonymous wallets, transactions from countries on the "grey" list, as well as the use of internet mixers and other payment masking technologies will remain under strict monitoring. It is expected that the new control rules will come into legal force approximately six months after the publication of the final version of the regulation.
Source: cursorinfo.co.il