The Israel Securities Authority (ISA) has formed a Committee to research and promote digital assets in Israel. The Committee is convinced that the blockchain’s decentralized ledger technology (DLT) has tremendous potential to influence the Israeli capital market. It, therefore, intends to promote security tokens under its jurisdiction.

Pursuance of Security Token Promotion Plan

The Committee is set to promote the usage of security tokens in next week through a press release at the CapiTech conference conducted by ISA. The committee will be working on digital platforms for trading offerings and clearance of securities using the distributed ledger technology (DLT).

Why Israel turned towards Security token Offering (STO)?

Tokens have been gaining massive popularity overcoming the pitfalls in Initial coin offerings (ICO).

Security Token Offerings are regulated and thus provide more security to the investors and are shielded from the fraudulent activities. Thus they are now gaining popularity and wide acceptance throughout the world. STOs are now promoted in various countries like the United Kingdom, the United States, France, Korea, Japan, Switzerland, and China as well.

ICO projects popularized the distributed ledger technology (DLT) and proved successful utility in asset management but the ICO projects failed on regulatory compliance. Thus security tokens replaced them providing core compliance security.

Committee’s work towards a Blockchain-based Economy

Orly Koren, the Committee Head elaborated ongoing tasks of the Committee which are on their priority list to resolve initially.

The group has so far worked on offerings for digital platforms, trading operations and clearance of securities. He is certain that these issues need to be addressed at the initial phase to promote a strong blockchain-based economy in the country.

ISA blockchain promotion Page Reveals the following information:

ISA page states that Israel’s Securities Authority (ISA) and Israel Innovation Authority (IIA ) asks for proposals from FinTech firms in Israel.

It further states that it is launching a pilot program along with Israel Innovation Authority (IIA) and has asked the FinTech firms to resolve its capital market challenges.

The firms which accept the challenges will be able to access ISA’s public historical archives with Metadata and huge historical database relating to Tel Aviv Stock Exchange trading.

The involved companies will also get 20% to 50% of R and D expenses along with close support and assistance from the ISA Staff. 

The ISA will appeal to various companies in the fintech industry to bid for developing a trading platform for security tokens.

Tel Aviv Emerging as Blockchain Hub

Recently Tel Aviv has been rapidly flourishing as a blockchain hub for innovators in this sphere. A recent survey in 2019, conducted by Bitcoin Association in Israel revealed a 32% increase in blockchain-related companies in the year. The recent promotions by ISA for security tokens will undoubtedly swell this figure in the coming days.

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Jayashree Ingle

CBW - External Analyst

INDIA