The Tel Aviv Stock Exchange (TASE) plans to launch the country’s first central securities lending platform on November 2. The system is based on blockchain technology and is currently being tested.
Currently, there is no central platform for securities lending on the Israeli market. Instead, it is carried out via interbank mechanisms. However, this means that the full potential of the market cannot be exploited.
Blockchain-based “Central Block Chain Securities Lending Platform
For this reason, the Tel Aviv-based stock exchange (TASE) plans to introduce the “Central Blockchain Securities Lending Platform”. Blockchain technology is a suitable solution for supporting securities markets due to its transparency and immutability.
In a press release, TASE stated that the system would centralise all securities lending activities and allow direct borrowing among market participants through a number of key financial instruments.
“The Tel Aviv Stock Exchange is proud to present this first lending pool, a secure and state-of-the-art platform. The blockchain technology will provide a new level of security for securities lending and will support the growth of transactions based on this new platform. TASE is a global leader in financial innovation and is strategically pursuing the technological development of the capital market.” – Orly Grinfeld, EVP and Head of Clearing at TASE.
By using Distributed Ledger Technology (DLT) as the basis of the new platform, there are several advantages and features of the blockchain:
- Support of Peer-to-Peer transactions
- smart contracts
- Increased safety due to unchangeability of the blockchain
TASE notes that the new system will reduce costs for all parties involved, increase security and allow the market to reach its full potential.