Clients updates / Banking Regulation

Bank Hapoalim and Israel Discount Bank will each pay the State Treasury ILS 40 million within the framework of an administrative settlement, in respect of their acquisitions of minority stakes in a competitor.

The European Union launched MiCA (Markets in Crypto-Assets) Regulation, which provides a clear and uniform regulatory framework for CASPs and is considered a global model for crypto regulation.

New provisions set out the licensing framework for the provision of payment services, designed to encourage new players to enter the Israeli market and offer payment services while providing broad protection to consumers. The law will apply to companies providing payment services, credit service providers, acquirers, and more.

The risk of money laundering is one of the main risks involved in using and trading cryptocurrencies. This amendment to Proper Conduct of Banking Business Directive 411 addresses how banks should manage money laundering and terror financing risks.

Although Israel is a world leader in the fintech field, companies operating in this area face many regulatory challenges. A newly published legal memorandum aims to enable the creation of a “sandbox”, with inspiration from various programs already implemented in Japan, Australia, and Singapore. The goal is to establish a unique experimental environment, a “regulatory sandbox,” where regulatory relief is granted to companies who choose to participate in the program.

The Bank of Israel recently led several important developments in the Israeli payments market, which are designed to encourage competition and to advance the implementation of innovative technologies.

Bank of Israel published a position paper with respect to the activity of banks’ payment apps in the B2C market. The position paper is the conclusion of a long battle waged by credit card companies against the banks.

The Tel Aviv District Court issued a ruling recently on a case concerning a bank’s conduct with funds whose source is digital currencies. The court expressly ruled that the bank’s blanket ban on the opening of bank accounts by clients engaging in digital currency activity is unreasonable.

Precedent set by the Tel-Aviv District Court rules that a bank may refuse to provide service to a company engaging in virtual currencies.