Tel Aviv Stock Exchange (TASE), Israel’s only public equity trading platform, is considering expanding its authorized activities to allow non-banking financial institutions (NBFC’s) to offer crypto trading services to their customers. TASE’s proposal to change its rules is now open for public comment and will later be submitted for approval by the entity’s board of directors.
The proposed structure will enable non-bank members to buy and sell crypto on customers’ demand through licensed crypto trading and custody services. TASE’s move to cover crypto trading for non-banks is an attempt to meet the growing demand for crypto while mitigating the various risks “that are inherent” in crypto activity.
The crypto market has faced significant turbulence, and regulators in Israel have been warning the public and institutions of the risks involved. In early February, the country’s markets regulator issued a warning against unlicensed crypto exchanges. On Sunday, the Bank of Israel warned local banks and credit card companies of the risks of engaging with crypto companies.
TASE’s announcement comes in the wake of its October strategy document, which revealed the platform’s plans to establish a blockchain-based digital asset trading platform. The document stated that TASE’s blockchain platform would provide the exchange with the necessary technology to expand its offerings beyond traditional asset classes.
According to a report by the Israeli publication Calcalist, TASE has already invested in several blockchain startups, including Clear, a platform for managing securities lending, and SETL, a blockchain infrastructure provider for financial institutions.
Israel has taken a cautious approach towards crypto, with regulators warning against its risks. In August 2021, the Israel Securities Authority proposed new regulations that would require crypto firms to disclose their holdings, trading volumes, and fees, among other things.
TASE’s move to enable non-banking financial institutions to offer crypto trading services to their customers is an attempt to meet the growing demand for crypto while mitigating risks involved in crypto activity. TASE’s blockchain-based digital asset trading platform is expected to play a significant role in the expansion of its offerings beyond traditional asset classes. As Israel’s approach towards crypto continues to evolve, it remains to be seen how the country’s regulators will respond to the crypto market’s growing popularity.