Tel Aviv Stock Exchange tokenizes fiat and bonds.
The Tel Aviv Stock Exchange has completed a new phase in integrating blockchain technology and traditional assets. The first dummy digital government bond has been minted as an ERC-1155 security token. This bond mint is part of the proof of concept (PoC) phase of Project Eden, a partnership between the Israeli Ministry of Finance and the stock exchange. The project aims to explore blockchain infrastructure in issuing and settling government bonds.
Another part of the proof of concept was the tokenization of an Israeli Shekel, the country’s fiat currency. This will serve as a digital payment token for transactions. A smart contract for bond management is used as an intermediary to ensure that transactions are verified and do not contain inconsistencies.
Several local and international banks attended the initiative’s go-live event, including Barclays, BNP Paribas, Deutsche Bank, First International Bank, Goldman Sachs, JPMorgan, Merrill Lynch, Bank HaPoalim, Bank Discount, Bank Leumi, and Bank Mizrah.
According to CEO of Tel Aviv Stock Exchange, Ittai Ben Zeev, “We believe that the Startup Nation can play a leadership role in the digital transformation of the capital markets. […] We believe that the capital market information will be completely different in a few years, and it is our job to lead the revolution.”
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The PoC was built on an Ethereum Virtual Machine (EVM)-compatible blockchain, allowing future integration with other blockchain solutions. Crypto firms Blockfold and Fireblocks are behind the distributed ledger infrastructure, enabling interaction across wallets and token standards for issuance and trading of treasury bonds.
The project aims to provide a settlement system for central bank digital currencies. The central bank of Israel is also analyzing stablecoin adoption and considering issuing a CBDC to prevent private companies from taking over the country’s digital payments system in the coming years.
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