TASE announces launch of a central securities lending platform built on blockchain technology
The Tel Aviv Stock Exchange (TASE), Israel’s public securities exchange, announced that it will roll out a centralized securities lending platform based on blockchain technology.
Currently, securities lending in the Israeli market is handled by banking groups that use internal mechanisms and bilateral arrangements between banks.
A blockchain-based platform could provide a more efficient and transparent infrastructure for the market.
If this new technology proves beneficial in Israel, it could be adapted for use in other markets that rely heavily on bank-to-bank over-the-counter (OTC) contracts, such as the global derivatives market.
Blockchain can transform the securities lending market
The blockchain-backed platform is set to disrupt the securities lending market in Israel by creating an ecosystem that enables major financial institutions to extend loans directly.
TASE expects the platform to become the central hub for all transactions and services related to securities lending. This will be achieved by providing access to a larger pool of securities and enabling faster allocation of positions.
Exchange members were able to trial the platform through a test environment that has been available since March. That environment allowed participants to experiment with lending transactions and adapt their systems for integration once the platform moves into production.
Enhanced security and transparency through blockchain
TASE recognizes the added security benefits of blockchain and its importance for the future of financial markets. The exchange is also focused on the advantages of direct peer-to-peer (P2P) transactions and smart contracts, which can simplify transactions and automate large parts of the process.
These features are expected to benefit the exchange platform, custodial banks, and clients through reduced costs and greater transparency, which in turn should expand market potential by attracting new investors.
Orly Grinfeld, EVP and Head of Clearing at TASE, commented on the blockchain application: “Blockchain technology will provide a new level of security for securities lending and support growth in transactions on the basis of this new platform.”