Which funds the amendment covers

Section 87A of the directive deals with payment services in connection with virtual-currency activity: transfers of money from the accounts of virtual-currency service providers, such as trading platforms, into the accounts of the bank’s customers. This is the situation of a person who sold digital currency and whose proceeds in shekels or foreign currency are due to reach his bank account.

The ban on blanket refusal

Under the amended text, a bank shall not refuse to provide payment services in connection with virtual-currency activity merely because the source of the activity is connected with virtual currencies. The explanatory notes to the circular state that a policy of blanket refusal may not be set, and that the decision is to be risk based, looking at the identity of the service provider, the characteristics of the currency and the characteristics of the transaction. The bank will still not provide the service where, on the information it holds, the service provider is in breach of the licensing or registration requirements of its country of incorporation.

Source of funds and the currency path

Until the amendment, where payment services exceeded NIS 100,000 a year, the bank had to look into, with the customer, the source of the funds used to buy or mine the currency, and the currency path. That duty will be removed. According to the explanatory notes, a single monetary threshold does not necessarily reflect the actual risk, so whether to review, and how deeply, will follow the risk profile of the transaction.

The bank must set out in its procedures when a review of the currency path is required and when it is not, and how it is carried out: evidence from the customer, the bank’s own checks, evidence from a service provider licensed in Israel, or an outside expert. According to the explanatory notes, an outside expert is to be used only where the level of risk requires it.

Factors that reduce and increase risk

The list is not closed, and each bank may add factors under its own risk assessment. Under the directive, banks may not set a closed list of currencies, and the characteristics of a currency serve to set the depth of review rather than necessarily as a condition for the transaction.

Disclosure to the customer

Each bank is to publish on its website the main points of its policy on the subject, in an accessible and clear way, so that customers understand on what terms the service will be provided. A bank that identifies a customer transferring, or asking to transfer, money to an account with a virtual-currency service provider is to bring its policy to the customer’s attention close to the first transfer.

Business customers and token issues

For a business customer, the risk profile will also reflect the characteristics of its business and the compliance mechanisms it operates. The bank will also set when it accepts funds from an issue of virtual assets to raise investment, such as an initial coin offering (ICO), looking at the issue, the currency, the country of issue and the law that applies there. This applies to funds from the initial issue, and not to trading in the secondary market.

Commencement, and the rules until then

The amendments take effect on 1 May 2027. Until then the previous text applies, including the review requirement above NIS 100,000 a year. A person who sold currency at a gain and whose bank refused the proceeds can pay the tax directly into the Tax Authority’s account at the Bank of Israel, under the temporary procedure extended to 31 December 2027.

Further reading

Sources

Supervisor of Banks Circular 2862, 7 October 2026, and the regulatory determination report · Proper Conduct of Banking Business Directive 411, section 87A