Today the Bank of Israel published a consultation paper regarding the regulation of stablecoins in Israel. It suggests that its proposals are enacted in legislation.
Three highlights are that algorithmic stablecoins will not be allowed, issuers may be allowed to have some central bank deposits as part of the stablecoin reserves, and Israel plans to largely adopt European regulations for supervision. That includes MiCA for stablecoin issuers and Europe’s PISA for supervising electronic payments.
Issuers have to be licensed as per MiCA. Hence the issuer must be incorporated in Israel and publish a white paper. In turn, this should describe how it operates and the fees involved. Issuers have to submit to regulatory oversight and provide consumer protections
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