On the grounds of many complaints from Israeli customers regarding the conduct of the banking system and its refusal to open and manage accounts which involve cryptocurrencies activities, Moshe Pearl, the chairman of The Association of Banks in Israel sent a firm letter to Dr. Hedva Bar, The supervisor of banks.

“We request that the banking supervision will issue clear and explicit guidelines. The guidelines should deal, among others, with the conduct of the banking system regarding opening accounts which involve cryptocurrencies activities, the purchase of cryptocurrencies, the participation of customers in ICOs and online purchasing using this kind of currency. All the above, with the proper reference to what will be constituted as a reasonable refusal to open accounts in these cases, and all through careful consideration of the bank system’s risks”.

Israeli banks note that they are in fact caught between a rock and a hard place in all related to cryptocurrencies activity: “The binding position of the Banking Supervision Department has not yet been clearly expressed,” the letter said. “The banking system is exposed on several fronts, and this is not a situation that can and should be accepted.”

Dror Shapira reinforced the association’s demand. Shapira is an entrepreneur and a well-known public figure in finance and technology. He is the head of INVIOU, a technological development company, which enables financing institutions to reduce risks by providing factoring services on the Blockchain platform.

“In Israel, there has been a significant increase in activity in the crypto industry, without a regulatory arrangement being set by the Bank of Israel, and without a specific directive to the banking system regarding how it should behave towards customers. Since there are no explicit rules for that kind of activity, each bank sets its own policy, usually a strict policy that makes it difficult for any activity in this field”.

Shapira adds “The banks are in an impossible situation. On the one hand they are subject to strict requirements regarding the prohibition of money laundering, and on the other hand, are obligated to allow customers to open accounts and provide them with banking services. Crypto activity is gaining momentum. This is a complex and sensitive issue which requires regulatory intervention that will finally provide clear guidelines and rules for action. The time has come.”

The Association of Banks notes that recently, some regulators began to relate to the issue of virtual currencies: The Tax Authority published a circular at the beginning of the year, the Money Laundering Authority and the Securities Authority began to examine the implications on trade aspects.