Hadva Bar, deputy to the CEO of Itoro, and formerly the supervisor of banks at the Bank of Israel, said today (Wednesday) at the Globes Israel Business Conference that “the crypto sector is experiencing a crisis and many concepts have been broken about it, but I estimate that it has emerged stronger from the current crisis – thanks to the expansion of regulation on The entire market, which we will see in the next two years.” According to her, “in Europe, regulation is already taking shape through – MICA – Markets In Crypto Assets Regulation”.
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“Regulation should expand and not deal only with money laundering and terrorist financing, but also with consumer issues, such as: preventing manipulations that harm customers, due disclosure to consumers, etc. In addition, imposing responsibility on the bodies to manage a wide range of risks – cyber, risks inherent in custodial, capital requirements And more. All this through licensing and supervision of all financial entities that deal in the field,” said Bar.
Barr added that it is extremely important that regulators regulate the crypto market. According to her, “the regulatory arrangement will support the innovation that exists in crypto and blockchain technologies and increase consumer confidence in the market, which is critical.”
Bar: “In my estimation, crypto will come out of the current crisis strengthened thanks to the expansion of regulation on the field, which is expected in the next two years – in Israel and around the world.” She added that “the regulation of the crypto field must also expand to consumer protection aspects such as preventing manipulation and adequate disclosure, as well as to licensing, capital requirements and supervision of the players in the field. The crypto regulation cannot remain only in the aspects of prohibiting money laundering. The expanding regulation in the crypto field will increase consumer confidence in the market And regulators have a primary role in regulating the crypto market to support innovation and protect customers.”
“Digital euro and digital shekel are not science fiction”
Referring to the central bank’s digital currency issue, she said, “Digital euro and digital shekel are not science fiction, they are a reality that is taking shape. We can say with almost complete certainty that in 4 years there will be a digital euro, followed by a digital shekel. These currencies are the natural development of money, and they will contribute to reducing Costs and improving the world of payments. In about 4 years we will see a digital euro followed by a digital shekel – this is not science fiction, this is an emerging reality.”
Regarding the desired model for the supervision of the banks, Bar said that her position is that the agreement formed in the team led by the Director General of Finance on the subject of changing the regulatory structure and creating a “twin peaks” regulatory structure for stability and competition and consumerism is good. I estimate that it will lead to increased competition, to the focus of emphasis on consumer issues, and to increase innovation in the financial sector in Israel, and of course it will also contribute to strengthening stability.”
Referring to the main disputes in the committee, she said, “Who will decide in the case of disagreements between the stability and competition regulator – I am of the opinion that the governor of the Bank of Israel, or the committee he chairs, should be given the right of veto, when differences of opinion arise on an issue that could harm the stability of the financial sector or the stability of a substantial financial body. This is similar The British supervisory model, in which the British Regulatory Authority (PRA) has a right of veto. The expectation is that the use of this right of veto will not be common, but only in very substantial cases.”
Referring to the issue of whether the supervision of pension funds will be included in the stability regulator, she said, “It is very important that it be so, and we now see the crisis in England as proof of this, where there is a real fear of the collapse of pension funds and a risk to financial stability in general. The Central Bank of England intervened in the bond market and in providing liquidity to the pension funds, to prevent this. There is no doubt that the pension funds are bodies of systemic stability importance.”
However, it is important to say that there is no single “winning” model of regulatory structure in the world; And it is clear to everyone that each supervision model has advantages and disadvantages, and there is also a high cost to switch from one model to another.”
She added that “changing the structure of regulation in Israel and moving to a “two-headed” model of a stability regulator and a consumer regulator is the right direction, which will support the improvement of the situation of financial consumers and also to strengthen stability, and that a “two-headed” supervision model must include a veto right for the Bank of Israel, in the case of A dispute between the regulators that could affect stability.”
*** The conference is in cooperation with Bank Hapoalim, sponsored by Phoenix, Amdocs, BDO, HOT, Geely, Shufersal, El Al, Tnuva, Profimax, the Medical Organization, MyDesk, Contigo, Cisco and with the participation of Mekorot, the Innovation Authority, Mobileye, Start Up Nation central, Ashdod port and electricity company