The Tel Aviv Stock Exchange and the Israeli Ministry of Finance have completed the Eden Proof of Concept project

TEL AVIV, Israel, 6 June 2023 /PRNewswire/ — The Tel Aviv Stock Exchange (TASE: TASE) and the Office of the Accountant of the Israel Ministry of Finance are proud to announce the successful completion of the Proof of Concept (PoC) phase for Project Eden, a ground-breaking collaboration that demonstrates the tremendous the potential of innovative technologies such as DLT, smart contracts and tokenization to reduce risk and improve the efficiency and transparency of financial markets. This joint endeavor marks a significant milestone in revolutionizing the settlement and issuance processes in traditional capital markets.

Project Eden is a unique project led by TASE in close collaboration with the Israeli Ministry of Finance. The collaborative team has dedicated significant effort and expertise to investigate the use of blockchain infrastructure in the issuance and settlement of digital government bonds.

The long-awaited live event was underway 31 May 2023 on the Tel Aviv Stock Exchange, prominent banks, both international and local, gathered (Bank Discount, Bank HaPoalim, Bank Leumi, Bank Mizrahi, Barclays, BNP Paribas, Deutsche Bank, First International Bank, Goldman Sachs, JP Morgan and Merrill Lynch).

During the live event, the Ministry of Finance issued and minted the first dummy digital government bond on a blockchain-based platform as an ERC-1155 Security Token using a dedicated decentralized app (dApp) developed leveraging web3 solutions specifically for this PoC. The blockchain used for this PoC was EVM compatible, enabling potential integration with other blockchain solutions in the future.

Project Eden also introduced a digital payment token as a fundamental component of the settlement process. Using smart contracts and the ERC-20 token standard, the payment token represented one Israeli shekel in the Eden ecosystem. During the Live day event, the primary dealers securely transferred dummy funds through their digital accounts. The Eden system was constructed in this configuration to facilitate the settlement of security tokens against various digital currencies, potentially including central bank digital currencies (CBDCs). This is consistent with ongoing projects led by central banks around the world as they explore the integration of CBDCs into traditional financial systems.

The settlement process was done through ‘Atomic Settlement’ between the security tokens and the payment chips, transforming the traditional securities settlement process through the dedicated TASE Bond Management smart contract. The TASE Bond Management smart contract acted as an intermediary between the issuer and the investors, ensuring the verification of valid and approved tokens, preventing inconsistencies or incomplete transfers, and guaranteeing the accurate transfer of tokens.

The live event demonstrated the successful implementation of advanced technologies, demonstrating their ability to transform financial markets, including the issuance, settlement and clearing of financial assets such as government bonds.

By leveraging DLT and tokenization, financial institutions can increase efficiency, reduce operational risk and create new opportunities for investors, thereby transforming traditional financial markets.

TASE and the Ministry of Finance are proud to be at the technological forefront, embracing cutting-edge technologies to upgrade the capital markets and make them more accessible and efficient. Through Project Eden, TASE and the Ministry of Finance have laid a strong foundation for future progress and innovations in the financial industry.

Yali RothenbergThe Accountant General, Ministry of Finance: “The Accountant General’s Office attaches great importance to the use of advanced technologies to improve the functionality of financial markets, and to provide better services to both businesses and citizens. “Project Eden” is at the forefront of global cutting-edge technology for the issuance and clearance of digital securities , and will contribute to the improvement, efficiency and accessibility of the financial system for the benefit of the general public.I would like to congratulate the Finance Department of the General Accountant’s Office and the Tel-Aviv Stock Exchange, for paving the way for the successful completion of the Project Eden proof-of-concept and look forward to continued fruitful cooperation.”

Gil Cohendeputy head of the accountant and head of the finance department, MOF: “Project Eden” is a collaboration with the Tel-Aviv Stock Exchange to issue, for the first time ever, an Israeli digital government bond, with a nuclear approval, over a dedicated blockchain-based platform. The proof-of-concept was carried out with the help of representatives from leading global and Israeli banks. Although day-to-day use of this technology to finance sovereign debt is still in the future, we believe that this demonstration advances the technological and regulatory discourse of all relevant parties to continue to evolve towards a common goal of improving the accessibility of financial markets for all. “

Ittai Ben Zeev, CEO of TASE: “Project Eden is very important for the Tel Aviv Stock Exchange. We believe that Startup Nation can play a leadership role in the digital transformation of the capital markets. Within TASE, we have tremendous technology talent and market structure leadership. We believe that Capital Markets Information will be completely different in a few years , and it’s our job to lead the revolution.”

Orly Grinfeld, EVP, head of clearing at TASE: “There is no doubt that the world is undergoing significant changes, which also affect traditional systems. By leveraging blockchain technology, smart contracts and tokenization, we have the potential to improve traditional capital markets, making them more efficient, faster and less risky. This has the power to revolutionize the way we do business. By leveraging this technology, traditional exchanges can create new business models, ultimately improving the services we provide to our valued investors and customers.”

“Fireblocks is incredibly proud of our collaboration with TASE, the Ministry of Finance, VMWare and Blockfold,” said Michael Shaulovco-founder and CEO of Fireblocks. “The success of the Live Day event brought to reality what we all envisioned – the interaction across wallets and token standards that enables near-frictionless issuance and trading of government bonds. We applaud TASE’s forward-looking vision and eagerly await what’s to come.”

BlockFold CEO and Co-Founder, Francois Schonkensaid: “It has been a privilege to work with Fireblocks to contribute to TASE and the Accountant General’s Proof-of-Concept Project Eden. Digitizing the financial system, A Bond at once”. The enormous success of Project Eden, evidenced, in no small measure, by the personal participation of all 12 invited primary traders during Live Day in Tel Aviv, can be attributed to the clarity of vision and tireless dedication of TASE and the Accountant General team. We are excited to see what happens next on their tokenization journey.”

Contact:
Orna Goren
Head of communications and public relations
Tel: +972 76 8160405
[email protected]

SOURCE Tel Aviv Stock Exchange Ltd.