Banks will not be able to automatically refuse cryptocurrency funds: the new rules of the Bank of Israel
The Bank of Israel has published the final version of guidelines for depositing cryptocurrency funds in the banking system, which will take effect on May 1, 2027. The main change: the cancellation of the automatic obligation to verify the source of funds and the path of digital currencies over 100,000 shekels per year, replaced by risk-based checks. Banks will not be able to automatically refuse to accept funds from cryptocurrency and will be required to examine each transaction on its merits.
The Bank of Israel has published the final version of guidelines for depositing cryptocurrency funds in the banking system, which will take effect on May 1, 2027. The main change is the cancellation of the automatic obligation to verify the source of funds and the path of digital currencies when the volume of transfers from cryptocurrency service providers to the customer's bank account exceeded 100,000 shekels per year. Instead, checks will be determined according to the risk level of the transaction. The Bank of Israel explicitly states that banks will not be able to use a policy of automatic refusal to accept funds originating from cryptocurrency and will be required to examine each transaction on its merits. Additionally, the 'currency path' component regarding the route of regular money after conversion has been removed from the definition. Banks will be required to classify transactions by risk level: money from a licensed cryptocurrency company in Israel will be considered a risk-reducing factor, while the use of cryptocurrency mixers or activity with anonymous wallets will require enhanced due diligence. The final version was formulated after a draft for public comments in July and includes clarifications regarding cryptocurrency companies and companies raising capital through ICOs. The Bank of Israel also published an accompanying report explaining that it completely canceled the financial threshold based on the perception that the transaction amount does not necessarily indicate risk. The regulation will be reviewed five years after its entry into force.