Last year Israel’s Ministry of Finance collaborated with the Tel Aviv Stock Exchange (TASE) to run a proof of concept for the issuance of a DLT-based government bond as a security token. Today it published a detailed report on the tokenization work.
As a quick recap, on 31 May 2023, the trial involved issuing the bond to a dozen banks as primary dealers. These included the major local banks and global brands such as Barclays, BNP Paribas, Deutsche Bank, Goldman Sachs and JP Morgan.
One of the cited benefits of blockchain is efficiency. The bond market has been a popular focus area because it is less developed than equity markets, and issuance involves considerable manual back and forth. Additionally, a lot of secondary trading happens over the counter, including for government bonds. However, that’s not the case in Israel, where TASE accounts for 70-80% of trading.
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