In order to get ready for the issuing of treasury securities on a blockchain platform, the Israeli Ministry of Finance has come up with a project that is currently being called “Eden.” The Tel Aviv Stock Exchange (TASE), a company that provides custody for digital assets, Fireblock, and VMware, a company that develops software solutions in the United States, are working together on this project.
According to the official press statement, “the deployment of the modern technology will decrease costs, shorten the period of issuing and clearing of government bonds, promote transparency, streamline operations, and limit risks.” (1)
As part of this initiative, the Israeli Ministry will shortly begin conducting tests on a platform supported by blockchain technology for the trading of digital bonds.
Yali Rothenberg, the Accountant General, made the following statement in response to the most recent event:
“I believe that blockchain-based technologies are here to stay and over time will enter the core of the financial markets, so fully and deeply transforming them. It is our responsibility to investigate emerging methods and technology continuingly.”
According to the official release, the project will make it possible to get a first and significant foothold, which will serve as the foundation for the subsequent improvement of other traditional processes in the future.
During the live test that is about to begin, units of the digital bond will be issued to the e-wallets of the participants who are buying them. These units will be purchased with digital currency, which will subsequently be transferred to the e-wallet that belongs to the Israeli Ministry (2). The pilot project is anticipated to be finished by the first quarter of 2023.
The most recent events occur amid reports and survey findings that indicate an increasing number of cryptocurrency fans in Israel. Recent Gemini polls reported that 28% of Israelis possessed crypto in 2022, of whom 51% were women, making Israel a world leader in crypto gender equality. As a result, the country has one of the greatest crypto-adoption rates anywhere in the world.
It’s a Start in Israel
Despite these numbers, institutional adoption of cryptocurrency in Israel continues to face significant obstacles due to the taxation regulations of the country. Additionally, a recent ranking placed Israel in third place among all countries for its crypto taxes.
However, Israel is not the first country to digitalize government bonds; this distinction belongs to another country. Over one hundred million dollars worth of blockchain bonds with a maturity of two years were sold by the World Bank for Reconstruction and Development and the Commonwealth Bank of Australia in 2018.
In December 2017, the European Investment Bank became the first financial institution to issue digital bonds using a blockchain.