Central banks around the world crypto coins While seeking regulation, the Bank of Israel’s Department of Banking Supervision released a draft regulation on the regulation of crypto assets in banks on Friday.
“Banks Will Have To Clarify The Source Of Cryptocurrency Transactions”
According to the statement, banks will especially need to conduct risk assessments and set policy for transfers from or into digital assets. In addition, banks will have to clarify the financial source from which the cryptocurrencies were purchased and all the transactions they went through from the purchase to the conversion into fiat currencies and transfer to the bank account.
The draft regulation of the Bank of Israel, the central bank of Israel, contains exactly the following statements:
According to this draft regulation, banking companies will be required to:
Bank institutions are required to conduct a risk assessment and establish policies and procedures for money transfers originating from or destined for virtual currencies, taking a risk-based approach and identifying the virtual currency service provider. If the service provider has obtained a license to provide financial asset services from the Capital Markets, Insurance and Savings Agency and is subject to the Anti-Money Laundering Regulation, banking institutions must examine each transfer individually. However, banking companies will not be able to give service providers a broadly negative response.
2. Banking institutions must clarify the financial source from which the cryptocurrencies are purchased and all transactions from the purchase of the cryptocurrencies to the conversion into fiat currencies and transfer to the bank account.
“Cryptocurrencies Have Risks for Money Laundering and Terrorism Financing”
In his statement on the draft, Yair Avidan, Head of Banks of Israel Bank, said:
“The Banking Supervision Department monitors cryptocurrencies as well as domestic and international regulations in this area. This outline was created in view of the increased client activity in such currencies and the potential of such assets in payments and international transfers.
Activity in virtual currencies carries a high risk under the anti-money laundering and terrorism financing prohibition. This draft regulation sets out a set of principles for managing such risks, thus helping banking institution customers who want to put money arising from virtual currency activity in banks, while also managing risks specific to the banking system within the scope of this activity.”
*Not investment advice.