Tel Aviv Stock Exchange and Israeli Ministry of Finance Completes PoC for Blockchain Based Digital Bond Platform
The successful conclusion of the Proof-of-Concept (PoC) phase for Project Eden has been announced by the Tel Aviv Stock Exchange (TASE) and the Israeli Ministry of Finance (MOF). Project Eden is a blockchain-based digital bond system that has been developed as part of the Israeli government’s initiative to modernize the country’s financial markets.
The initiative, initially unveiled in October, aimed to showcase the potential of cutting-edge technologies like blockchain, smart contracts, and tokenization in mitigating risk and enhancing efficiency and transparency in the financial markets.
According to Ittai Ben Zeev, the Chief Executive Officer of the Tel Aviv Stock Exchange (TASE), the success of the TASE is heavily reliant on “Project Eden”. TASE boasts considerable technological expertise and holds a prominent position in market structure leadership. It is our conviction that the capital market data landscape will undergo a complete transformation in the coming years, and we consider it our duty to spearhead this revolution.
According to the announcement, this collaborative endeavor represents a noteworthy achievement in transforming the settlement and issuance procedures within conventional capital markets. “The team of collaborators has invested a substantial amount of time and expertise in analyzing the implementation of blockchain technology in the issuance and settlement of digital government bonds.
TASE organized a go-live event on May 31, which was attended by prominent local and international institutions including Bank Discount, Bank HaPoalim, Bank Leumi, Bank Mizrahi, Barclays, BNP Paribas, Deutsche Bank, First International Bank, Goldman Sachs, JP Morgan, and Merrill Lynch, as part of the trial. At the go-live event, the MOF successfully issued and mined the inaugural “dummy digital governmental bond” on a blockchain-based platform. This was achieved through the use of an ERC-1155 security token and a decentralized application (dApp) that was specifically developed for this proof of concept.
A digital payment token, which represents one Israeli Shekel, has been introduced as a component of the Eden ecosystem. The payment token constituted a crucial component of the settlement process. As per a press release, sham funds were transferred by primary merchants through their digital accounts during the Live day event. The configuration of the Eden system was designed to enable the settlement of security tokens against a range of digital currencies, which may encompass central bank digital currencies (CBDCs). This aligns with the continuous efforts undertaken by central banks worldwide to explore the integration of CBDCs within conventional financial frameworks.
The Atomic Settlement platform facilitated the settlement process between security tokens and payment tokens by leveraging the TASE Bond Management smart contract. This innovative solution has revolutionized the traditional securities settlement process by providing a dedicated platform for managing smart contracts. The TASE Bond Management smart contract served as an intermediary between the issuer and the investors, ensuring the validity and approval of tokens, preventing incomplete transfers or inconsistencies, and ensuring the accuracy of the settlement process.