TASE announces launch of a central securities lending platform supported by blockchain technology
The Tel Aviv Stock Exchange (TASE), Israel’s public exchange, has announced plans to launch a central securities lending platform built on blockchain technology.
Today, securities lending in the Israeli market is managed primarily by banking groups using internal mechanisms between banks.
A blockchain-based platform could deliver a more efficient and transparent infrastructure for the market.
If the new technology proves successful in Israel, it could be applied to other markets that rely heavily on over-the-counter bank-to-bank contracts—such as the global derivatives market.
Blockchain can reshape the securities lending market
The blockchain-backed platform is set to transform securities lending in Israel by creating an ecosystem in which major financial institutions can engage in direct lending relationships.
TASE expects the platform to operate as a single point of access for all transactions and services related to securities lending, enabling a wider range of securities to be lent with shorter settlement windows and reduced required positions.
Exchange members were given an initial test environment in March to trial the platform, allowing them to simulate lending transactions and begin adapting their internal systems to integrate with the platform once it reaches production.
Enhanced security and transparency through blockchain
TASE recognizes the additional security benefits blockchain can bring and considers this capability important for the future of financial markets. The exchange is also interested in the advantages of peer-to-peer (P2P) transactions and smart contracts, which will streamline operations and automate much of the process.
These features are expected to benefit the exchange, custodians, and clients by lowering costs and increasing transparency, which in turn should boost market potential and attract new investors.
Orly Grinfeld, TASE’s Executive Vice President and Head of Clearing, commented on the blockchain application, saying that “the blockchain technology will introduce a new level of security for securities lending and support the growth of transactions based on this new platform.”