Tel Aviv Stock Exchange completes Project Eden proof-of-concept

by Arthur · June 11, 2023

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The Tel Aviv Stock Exchange (TASE) achieves another impressive milestone in revolutionizing its services using blockchain technology following the minting of an ERC-1155 Security Token for the settlement of digital government bonds.

The security token, a digital representation of the Israeli shekel, follows the successful completion of a Proof of Concept (PoC) phase to integrate tokenization with the exchange. Dubbed Project Eden, the ambitious plan seeks to leverage blockchain and smart contracts to promote efficiency and transparency in the marketplace.

To commemorate the end of the PoC, TASE organized a live event with leading local and international commercial banks present to showcase the tokenization use cases. Financial institutions present include Barclays, BNP Paribas, Deutsche Bank, Goldman Sachs, Bank Leumi, Bank Mizrahi and Hapoalim.

In collaboration with the Ministry of Finance, TASE demonstrated that primary securities dealers could use the “dummy funds” to facilitate the settlement of securities. The project used the TASE Bond Management smart contract to act as an intermediary, validating tokens, preventing inconsistencies and guaranteeing the accuracy of transactions.

“Project Eden is very important for the Tel Aviv Stock Exchange,” said Ittai Ben Zeev, TASE CEO. “Within TASE, we have enormous technology talent and market structure leadership. We believe that capital market information will be completely different in a few years, and it is our job to lead the revolution.”

Blockchain infrastructure provider Fireblocks revealed that the settlement process between security tokens and payment tokens was achieved via TASE’s proprietary “Atomic Settlement”. By leveraging the Ethereum Virtual Machine (EVM) compatible ledgers, Project Eden is expected to be compatible with various blockchain solutions.

Apart from a handful of commercial banks, the project received technical support from private blockchain technology companies such as Fireblocks, Blockfold and VMWare. With the project set to undergo further experiments, stakeholders are assured of seamless issuance and trading of government bonds using blockchain tokenization.

Blockchain settlement is the rave of the moment

Several banking regulators around the world are racing to develop blockchain-based settlements in the form of central bank digital currencies (CBDCs). The Bank for International Settlements (BIS) and the Bank of England joined forces to explore the possibility of integrating blockchain into the country’s real-time gross settlement system (RTGS).

The 44-page report showed promise with participating banks registering residential apartment purchases via a synchronization network, thereby reducing time, cost and risk.

Commercial banks are also investigating the use of blockchain to improve interbank transactions, experimenting with deposit tokens, stablecoins and a shared settlement system.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC Handbook.

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