Israel Stock Exchange Launches Blockchain-Based Securities Lending Platform

Tel Aviv Stock Exchange (TASE) has launched a blockchain platform that will become a one-stop solution for lending securities.

According to a statement from TASE, the Central Blockchain Securities Lending Platform will provide a single national market in which Israeli businesses can borrow and lend in securities to cover short-term asset sales with each other directly.

As noted in the TASE press release, usually the provision of securities is carried out using interbank mechanisms within and outside the limits of banking groups. As a result, the market cannot fully satisfy the potential needs of participants in economic relations.

The new blockchain platform will become a universal solution for all securities lending operations, opening up quick access to large volumes of assets and working with short-term positions.

According to the statement, in March 2020, TASE members were given access to a test version of the platform to test the operation of credit transactions and adapt their systems to prepare for the platform’s implementation.

Using distributed ledger technology (DLT) as the basis for a new trading platform will enable market participants to take advantage of the core benefits and functions of blockchain. In particular, we are talking about P2P transactions, smart contracts and increased security, which is possible due to the immutability of the blockchain.

As noted by TASE, this will improve the work of custodians and clients of the exchange, as it will reduce costs, increase security and allow the market to reach its full potential.

Stock exchanges are increasingly turning to blockchain. One of the largest projects in this area is currently being developed by the Australian Stock Exchange (ASX), which wants to launch a clearing and settlement system on the blockchain. Recently, however, it became known that market participants are demanding from ASX systems for two years, as the new project “lacks clarity.”

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