The Tel Aviv Stock Exchange, the first global player in the Israeli market, has announced launching a blockchain-powered securities lending platform in partnership with the Floor, Accenture, Hyperledger and Intel.
There is currently no central securities lending platform in the Israeli market. Securities lending is carried out on the capital market, mainly using inter-bank mechanisms within, and if necessary outside, banking group limits. As a result, the market has not been fully exploited to satisfy the potential needs of economic agents. Thus it was decided to create one central platform that will transform the Securities Lending market in Israel by enabling direct lending among all the major financial instruments.
The Tel Aviv Stock Exchange (TASE) is Israel’s only public stock exchange that fulfils a major role in the Israeli economy and is a key player in the nation’s economic growth. It is the home turf on which corporate Israel raises capital to finance investments and activities, and for the government to bring the public into its companies as they are privatized.
The TASE’s main function is to approve the issue of diverse types of securities and to supply advanced facilities for trading in securities and clearing transactions, including real-time trade data and announcements.
According to the TASE, its new Blockchain Securities Lending (BSL) project will fundamentally transform the domestic market by harnessing several of blockchain technology’s core facets including direct peer-to-peer transactions, smart contracts and immutable data recording.
The project will bring together the TASE, Accenture, Hyperledger, the Floor, and Intel to develop this innovative platform, the first of its kind. This cooperation was born in March, 2017 during an international Blockchain Hackathon and quickly transitioned to a concrete opportunity. Intel will encrypt transaction data and keep it private among participants of a transaction within the platform, services giant Accenture will lead the joint-effort by managing the project, integrating it into existing systems and providing cybersecurity consulting to further secure the platform.
“The platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions,” the press release reads.
The platform will be based on enterprise blockchain software Hyperledger Sawtooth — an enterprise Blockchain platform for building Distributed Ledger (DLT) applications. This will provide the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability.
What is more, this project is structured with a two phased approach comprised of an initial Proof of Concept (PoC), which upon its success will be followed by a deployment of the solution in a production environment.
“The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform,” said Ittai Ben-Zeev, TASE’s CEO. He added: “Without a doubt, TASE is now, more than ever before, a global financial innovation leader.”