The Securities and Exchange Commission (ISA) will host the first blockchain hackathon in Israel. The task is to find promising solutions for the securities market.
ISA Chairwoman Anat Guetta said that a hackathon will be organized in Tel Aviv on March 24, with the help of which the agency hopes to attract the attention of developers of blockchain solutions.
The main topic announced by the organizers was the issue of securities and government bonds using the blockchain. The initiative received the support of the Israeli Ministry of Finance. Technology providers VMware, Algorand and QEDIT are going to take part in the hackathon.
The hackathon is considered part of the ISA initiative to collaborate with the financial innovation sector and gain input to regulate traditional finance and cryptocurrencies. Guetta hopes that the ISA’s actions will encourage other regulators to promote blockchain-related projects:
“The hackathon should be the meeting place for ISA with developers, technology companies and academics. Regulators and other stakeholders will be able to gain in-depth technical knowledge of international fintech developments. This is the first forum organized by Israeli regulators to discuss the possibilities of the latest technologies.”
The ISA chair believes that regulators often fall behind on technology. The ISA considers cryptocurrencies and blockchain to be two separate entities. The department sees great potential in the blockchain, and thinks about cryptocurrencies that they should be controlled both in Israel and in other countries.
As for the methods of regulation, Guetta said that it is not worth “reinventing the wheel” here. ISA does not plan to interfere with the work of cryptocurrency firms if they are registered in the country and receive the necessary license. The Israeli government is monitoring blockchain and cryptocurrency regulations in other countries and is considering how this can be applied in Israel.
The creators of blockchain-based solutions and the companies using them must have a clear understanding of what is acceptable and what is not. A clear legal framework will create favorable conditions for technology providers to work, and this will have a beneficial effect on the country’s economy, Guetta added:
“Regulators didn’t notice when the ICO craze started in early 2018. Now there is a wide variety of cryptocurrencies: stablecoins, internal tokens, NFTs. Therefore, to establish control, it would be more correct to adopt a broad definition of cryptocurrencies. The differences between securities and cryptocurrencies are not very clear. Eventually, regulators will consider all cryptocurrencies as securities, regardless of their varieties.”
Guetta clarified that she does not distinguish between bitcoin and any other crypto asset. When bitcoin was introduced in 2009, it was a “little known phenomenon” and today many crypto assets are on the same path. Today, bitcoin is not considered a security, but sooner or later regulators will begin to consider it as such if the definition of cryptocurrencies is unified, Guetta concluded.
Recall that in January, ISA created a committee for the development of the blockchain. Its tasks include identifying the benefits and risks of blockchain implementation in various industries.
