By
Bena Ilyas
April 25th, 2024
According to Ittai Ben-Zeev, CEO of TASE, the financial markets have undergone a significant change recently as a result of the advent of cutting-edge technology that alters how investors and clients throughout the world conduct their business.
The government of Israel has announced that it is testing the clearing of digital bonds of the state of Israel on a blockchain platform. The announcement also added that the Tel Aviv Stock Exchange (TASE) and the Accountant General have formed a joint team to conduct a Proof of Concept (PoC) with digital asset infrastructure firms VMware and Fireblocks through the Financing Division’s Debt Unit.
The new initiative, dubbed “Eden“, introduced in Israel aims to lower costs, shorten the time needed for the issue and clearing of government bonds, increase transparency, simplify procedures, and reduce risks.
The live test will see units of the digital bond issued to the e-wallets of the acquiring participants, and purchased using digital currency, which will then be transferred to the e-wallet of the Israeli government.
The PoC will include the digitalization of a new series of bonds and its issuance to the system participants. Leading foreign and domestic (primary dealers) banks will take part in a “live test” as part of the issue, during which they will be linked to a special blockchain system that will be created by TASE and the chosen technology vendors.
The acquired units of the new digital bonds will be issued into the e-wallets of the acquiring participants and paid for in digital currency, which will be transferred to the Israeli government’s e-wallet.
“The current project kicks off the journey into this new world, allowing a first and important foothold that will serve as the foundation for the upgrading of other traditional mechanisms down the road,” the Israeli government said on Wednesday.
According to Ittai Ben-Zeev, CEO of TASE, the financial markets have undergone a significant change recently as a result of the advent of cutting-edge technology that alters how investors and clients throughout the world conduct their business.
“As a global technology leader, we hope to see Israel spearhead financial technology as well, being the first to implement cutting-edge technologies and upgrade the capital market, making it more accessible to the public,” he added.
Fireblocks CEO and co-founder Michael Shaulov also chipped in stating that digitizing the financial system requires the cooperation of both the public and private sectors. He added that Fireblocks is honored to work with the Israel Ministry of Finance, the Tel Aviv Stock Exchange, and VMware to develop the first digital state bond in Israel.
Israel has had a long-standing relationship with cryptocurrency and blockchain. Tel Aviv hosts its Blockchain Week conference every year, while the number of blockchain startups grew by 32% in 2019, a year that saw Bitcoin and the crypto market embark on a bear run.
In the later stage of September, Israel’s top markets regulator, granted local cryptocurrency exchange Bits of Gold one, arguably the largest crypto exchange in the country, its first licenses for exchanges that target crypto financial-services providers.