Virtual Currency and Payment Services: A Draft Open for Comment, Not Yet a Rule
You sold virtual currency, the money moved from the exchange to your bank account and suddenly the bank calls: "Where did the money come from?" Strange? Insulting? Not at all. Soon that question may also appear in the directives.
On 14 July 2026, the Banking Supervision Department published a draft regulatory update on managing anti‑money‑laundering and counter‑terrorist‑financing risk. The risk concerns payment services provided in connection with customers' virtual‑currency activity. The key word is "draft." It was issued for public comment, not brought into force on publication day.
A risk at the interface, not a ban
Understand what the draft addresses and what it does not. It does not prohibit holding virtual currency. It concerns the interface where this activity meets payment services. A bank or payment provider handling funds originating there needs rules. The draft proposes those rules, and the final wording may change after comments.
What is absent? According to the announcement, there is neither a list of permitted currencies nor an exempt amount. Quoting an unpublished threshold invents one. Any such figure must be read in the final text.
The documentation to keep now
What should you do meanwhile? Anyone converting virtual currency into shekels and transferring it to a bank should keep withdrawal confirmation, a source address if available and the date. Without these, a bank inquiry stalls. Gather documents before the transfer, not after the account is restricted.
Notice that July's draft did not create the question. Banks can already ask about the source of funds under existing rules. The draft signals only that supervisors are writing this explicitly for payment services too.
If you have already been asked, do not wait until consultation ends. Send what you have and contact the bank through an authenticated channel with dates. The draft is not an individual decision against you.
Mistakes that complicate everything
The temptation to bypass the question is understandable: transfer through an acquaintance's account or open one under another name. Do not. Such a transfer makes the acquaintance part of the chain, and any blocked amount will be blocked in their account. An account under another name only complicates scrutiny rather than bypassing an existing rule.
A business accepting virtual‑currency payments and converting them to shekels receives no approval from this draft that its process is compliant. It receives a signal that the regulator is examining the interface. Tax advice and invoicing remain outside this draft.
Two tracks not to confuse
Another distinction saves time with a bank officer: the digital shekel is not the virtual currency addressed in the draft. They are different. One is under central bank research. The other is existing activity in which supervisors seek to identify risk. Confusing them in conversation prolongs the review.
Whom it does not concern
Someone receiving a regular salary with no virtual‑currency activity need do nothing. The draft does not change the payslip. It concerns only people connecting such activity with payment services.
One final suggestion: bookmark the 14 July announcement. When a final directive appears, compare it with the draft to see what remains. A group summary that omits "draft" turns a proposal into law.
