The Tel Aviv Stock Exchange (TASE) has announced the development of a blockchain-powered securities lending platform that the bourse operator believes will enable direct lending among all major financial instruments in the country.
Calling it ‘one of the first projects of its kind in the world’, the TASE says 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 ‘private’ blockchain platform will be based on enterprise blockchain software Hyperledger Sawtooth and will use Intel as a technology partner to 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.
TASE adds the platform will serve a ‘one-stop-shop’ for all manners of securities lending activities that will also be able to support large volumes of securities transactions in quicker timeframes as well as ‘operating in shorter-term positions’. Beyond improving operational efficiency and speeds, TASE says the blockchain platform will also reduce costs significantly for custodians and their clients as well as the operator itself.
TASE chief executive Ittai Ben-Zeev added:
“The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform.”
The development of the blockchain platform will first see an initial proof of concept (PoC). Its success will see a wider deployment of the blockchain-based lending platform for the real-world.
Israel’s only public stock exchange, the TASE is under the direct supervision of the Israel Securities Authority (ISA), the domestic capital markets authority. The exchange’s embrace of blockchain technology comes despite a recent regulatory move by the ISA to ban cryptocurrency firms from trading or listing on the TASE.
TASE interior image from Shutterstock.