The central bank of Israel informed local banks they must accept cryptocurrency profits from account holders. According to reports, the Bank of Israel (BoI) has instructed local banks that they will need to accept the profits of digital asset ventures, provided the money source is not connected to criminal activities. This procedure is meant to be used in conjunction with the Money Laundering Prohibition Ordinance that applies to crypto-related entities as well as their operations.
The BoI’s directive is intended to improve the rules that apply to cryptocurrency entities and manage banks’ risk when transferring and receiving digital assets. The central bank has instructed all local financial institutions to accept any profits from cryptocurrency operations.
The circular outlines the details that banks should keep in mind when processing digital asset transactions. These details include the nature and size of the initial funds, as well as the risk classification.
The BoI recognizes that banks have to conduct a risk assessment and manage their funds and refuses to allow customers to transfer money to the Bank in relation to digital currency transactions. The bank allows banks broad discretion to refuse to transfer funds in certain cases that do not pose a risk of money laundering.
A month ago, Israeli authorities announced that they would impose new regulations for the cryptocurrency industry. This should reduce the use of Bitcoin and other cryptocurrencies in illegal activities. All crypto-related businesses will need to file regular reports. These businesses will be treated like traditional banks, expanding cryptocurrency’s acceptance as a fiat alternative.