The Bank of Israel Issues Draft Cryptocurrency Deposit Guidelines

Banks in the country may soon lose their ability to refuse fiat deposits derived from crypto activity outright.

Israel’s central bank announced draught regulations that might open the country’s financial system to cryptocurrency startups by requiring banks to analyze each company individually rather than issuing blanket rejections.

According to the draught, which was published on the bank’s official website on Thursday, banking corporations must perform risk assessments and establish policies and procedures for transfers originating in or destined for virtual currencies.

Banks would be “forced to analyze each case on its own and will not be permitted to issue a blanket rejection to the service provider” for likened crypto companies or financial asset service providers.

Banks will also be compelled to disclose the source of funds used to purchase cryptocurrency and to track its movement “from the time it is purchased until it is converted to fiat currency and deposited into a financial corporation’s account.”

The draught is consistent with newly implemented anti-money laundering (AML) regulations in November. At the time, crypto proponents in Israel told CoinDesk that banks had historically adopted an ad hoc approach to taking crypto deposits, and they were hopeful that new legislation would make it easier for banks to onboard crypto consumers.

The proposal is open for feedback and will be followed by the formulation of final guidelines.

Regulators worldwide are tightening AML legislation and compliance requirements in order to prevent cryptocurrency from being used for money laundering. European Union legislators are attempting to strengthen the EU’s new anti-money laundering authority’s monitoring of virtual currencies. Earlier this year, a collection of significant financial firms operating in the United States, including Coinbase, Fidelity, and Robinhood, teamed up to bring digital assets into compliance with global anti-money laundering (AML) regulations.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research

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