ISA chief Hauser: Bitcoin is out of control

Shmuel Hauser, photo: Eyal Yitzhar

"Blockchain is a legitimate technology that will be part of our lives and will lower investors' costs."

Just before his resignation takes effect, Israel Securities Authority (ISA) chairperson Prof. Shmuel Hauser is taking note of what he regards as an important future threat to the financial world. "There is no avoiding imposing order on digital currency. A distinction must be made between blockchain, bitcoin, and ICOs," he stated at the ISA Companies Conference. "Blockchain is a legitimate technology that will be part of our lives. We will adopt it, and it will make it possible to lower investors' costs," he commented, but immediately added, "Bitcoin is a digital means of payment whose value appears to be out of control. There is a risk of a bubble with it, one characteristic of which is the herd effect. The rush to invest in bitcoin reminds me of the 19th century gold rush."

Hauser went on to say, "ICOs (initial coin offerings - digital tokens) are a different story. We'll have to bring order into the market… we'll have to define for ourselves and the market just what this creature is. Among other things, we'll have to consider extending supervision to currency securities and defining an appropriate regulatory framework different from the one we know for securities offerings."

Hauser added, "Digital currencies and public offerings of such currencies must receive friendly regulatory attention, perhaps even daring to some extent, in order to create the possibility of developing an international financial center for currency securities of the ICO type. At the same time, the regulatory framework will have to show a degree of paternalism in order to make sure that no one turns digital currencies into a mutation of the binary options industry."

Commenting on the main target of his term, which is still unachieved - consolidating the status of and strengthening the Tel Aviv Stock Exchange (TASE), mainly the stock market, Hauser pointed an accusatory finger, saying, "The TASE members who feel the new winds blowing on the TASE feel threatened, and there is therefore a feeling that they are trying to delay bringing in new TASE members. I'm telling them that they won't succeed, and that their efforts only confirm the necessity for structural change. Why are the TASE members opposing new members, such as Interactive Brokers? The reason is fear of competition. I have said, and I still say, that we will act to reduce the fees for trading on the TASE."

Hauser had no new light to shed on the conclusions of the committee for creating a market for small and medium-sized companies. He said it could be part of the existing stock exchange or outside it, and again called for a regulatory ceasefire and tax benefits for capital market investments as solutions for the situation.

He also commented on the trader platforms market, saying, "We spoke, and we acted. Today, this is an orderly and supervised market, in which only a few of the rogue players are active."

Hauser also referred to last week's announcement about the end of his term this January, a year before it expires. He summed up by saying, "During my term, we came, we learned, and we changed. We carried out hundreds of measures. We devised an ambitious and well-ordered plan, a rare occurrence in the public sphere, which set targets and plans for the coming years."

Published by Globes [online], Israel Business News - www.globes-online.com - on December 4, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Shmuel Hauser, photo: Eyal Yitzhar
Shmuel Hauser, photo: Eyal Yitzhar
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