Next month, the Israel Securities Authority (ISA) will organize its first technology hackathon as part of a larger effort to oversee the country’s burgeoning fintech industry.
In conjunction with the hackathon, which will take place on March 24 in Tel Aviv, the ISA hopes to attract blockchain-based ideas that will help to strengthen the infrastructure supporting the Israeli securities and sovereign debt markets.
In an exclusive interview with CoinDesk, the ISA’s chairwoman Anat Guetta revealed that the blockchain hackathon is part of a bigger drive by the “leading fintech regulator in Israel” to communicate directly with specialists in fintech innovation as well as to begin building the skills required for Israel’s long-term aspirations to regulate the crypto and fintech industries.
“The main motivation behind the hackathon is to facilitate the transfer of technology from a developmental environment to applications in a large-scale live environment that may bring to light various technological, business and regulatory issues.”
In doing so, she intends to encourage other Israeli agencies to support ventures incorporating new technologies by integrating them into the country’s current capital market infrastructures.
Regulators are lagging behind the market
Nevertheless, when it comes to crypto and blockchain, the chairwoman of the ISA acknowledged that “regulators are lagging behind when it comes to technology.”
Thus, the regulator is trying to strike a balance by keeping an eye on and enforcing regulations in the industry while also staying up to date with technological advancements around the globe.
“At the end of the day, our aim is to get the power that we need in order to supervise and to build this new market for new participants because we understand that regulation, as in many other fields, is the license to do business.”
“We see the statistics. We see that most blockchain companies are not operating in Israel. They prefer to operate outside of Israel. I think that we’re losing them as an economy and as a country. We need very precise and clear laws in order to bring them back here. And we should create the conditions to let them work from Israel in a legitimate and acceptable way. So, our higher mission is to get the right powers in order to enable this.”
Overall, Guetta feels that a comprehensive regulatory framework covering the whole cryptocurrency sector from start to finish is needed. She argues that authorities require oversight to examine cryptocurrencies as the technology is moving at a pace that they otherwise can’t keep up with.