The Tel-Aviv Stock Exchange (TASE) announced the launch of its Central Blockchain Securities Lending Platform, which will be the first of its kind in Israel. It’s expected to boost direct lending among all the major financial instruments, and will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions.
The use of distributed ledger technology (DLT) as the basis of this new trading platform will harness some of the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, smart contracts, and enhanced security through immutability. All of these are expected to benefit TASE, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.
Orly Grinfeld, EVP and head of Clearing at TASE, said in a statement: “The Tel Aviv Stock Exchange is proud to present this first-of-a-kind lending pool, a safe, cutting-edge and state of the art platform. The blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform. TASE is a global financial innovation leader, and strategically pursues the technological advancement of the capital market.”
In March 2020, TASE members were given access to an initial testing environment, in order to test lending transactions in the new platform and adapt their systems in preparation for the production phase. Securities lending is at present executed using inter-bank mechanisms within, and if necessary outside, banking group limits. As a result, the market has not been fully exploited to satisfy the potential needs of economic agents.