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Tel Aviv Trading Market is Transitioning to Blockchain

Denis Goncharenko

Tel Aviv has been trying to transition to a blockchain-based system since 2018 when it first unveiled its Blockchain Securities Lending platform that was created in collaborations with Accenture and The Floor. Israel lacks a centralized security system for its lending platforms and this new project is supposed to take the lending market to a next level, allowing for faster and cheaper transactions that can also be safe and secure. The financial markets have been slowly trying to embrace this innovation and make the best of what blockchain has to offer, specifically to the services that are solely based on international transactions and are in great need of faster and more efficient services.

10-12-2019 09:17:43  |   Investments
Staying away from the traditional centralized platforms, Tel Aviv wants to embrace blockchain and all of its novelty, while also giving the newer companies a chance to build their resume as they help Israel develop its lending platform to be modern and easy to use. Trading markets have gotten much bigger thanks to the technology, markets including stock, fx, and bonds, but also the trust that surrounds the existing companies and brokers doing the work for the clients. These days Forex broker reviews have made the process much easier. Now, with the introduction of blockchain into the equation, the process could become even more transparent.

How Tel Aviv made the transition

As the original plan was coming to an end, Tel Aviv also partnered up with Blockchain Technology Partners, an Edinburgh-based startup that works on creating blockchain-based securities for financial platforms, a lending platform in Tel-Aviv’s case. BTP started operating just two years ago, and this is their first major project. The platform is already being tested on security, support, and user acceptance to make sure that the launch, planned for later this year, will go on smoothly. Tel Aviv’s Stock Market wants to use the cutting edge technology that would be available for all the participants of the market. But it's not just that TASE wants to update their existing market, this system will allow for many more people to access the market at the same time, hence increase its volume and outreach. Tel Aviv definitely won’t be the only country transitioning its financial market onto the blockchain and conducting popular services through this innovative technology that not only saves time and money but also makes the entire process more inclusive and accessible for wider groups.

This partnership will focus on simplifying the blockchain-based process and make the management of the blockchain network easier to make it more approachable for everyday people who may have never even used the distributed ledger technology to transfer any sort of asset.

Israel's financial scene

Towards the end of 2018, the global securities lending aggregate was $2.4 trillion, and the profit reached $5 billion. So the lending industry is booming in Israel but the technology used to make the financial services happen doesn’t necessarily match it. That is why Tel Aviv has been working towards upgrading its current system and catching up with the technological advances so it can not only deliver better service but also increase its profit which is already quite substantial. With the improved services in place, TASE hopes to also make room for more substantial lending, while also decreasing the cost and making settlement faster.

The TASE worker with multiple partners on this project aside from BTP. Accenture, Intel, and The Floor worked collaboratively to create a system that would accommodate the Israel customer and consider the peculiarities of the Tel Aviv Stock Exchange. But Israel won’t stop adjusting the stock market lending, and soon the financial services of all kinds could be made possible through blockchain.

Building a blockchain platform

When it comes to privacy, TASE went with Intel SGX chips and Hyperledger Sawtooth protocol, developed by BTP, with help from Intel as well. Before the Tel Aviv Market decided to turn to the blockchain, Spain’s stock market did the same, earlier last year, along with the German distributed ledger technology solutions, Credit Suisse and many other important banks and financial service providers. Blockchain is becoming an essential part of massive transactions and online services. It gives the enterprises an opportunity to increase the volume of their business immensely while not sacrificing the quality of their work it delivers a more well rounded, better priced safe service that is also modern and fitted for today’s customer.

Many markets are starting to transition to this model of reading, be that the stock market or forex market. While blockchain should only be used where it can actually improve the situation instead of introducing additional challenges, for the exchange markets, blockchain technology is a given upgrade. Not only does it provide transparency to prevent criminal or illegal activity, but it also creates a more efficient system that will make trading much easier for everyone involved. It will promote the elevated quality of transactions while requiring less effort from the parties involved. The main problem with this transition is that while the blockchain platform is much safer, those who can do damage and disrupt it has an upper hand because there are not that many cases of these criminal activities so even the industry professionals don’t know how to protect themselves from such attacks sometimes.

As technology becomes more mainstream and the information about innovation becomes more accessible.

For markets such as FX that are open 24/7, the blockchain technology acts like a godsend from the IT department. The core value that this technology brings to the market is mostly based on trading robots. These pieces of software are able to turn hours of struggle and repetitive action into just a fraction of a second once a person presses the button. All that people have to do is give the initial indications to the bot and send it on its merry way. Sure, this is not a free luxury, but looking at it as a way of buying time really helps trading bots shine in a different light. Instead of spending time configuring trades, people tend to prefer spending just a little bit to save hours of work that they can dedicate to something else, such as opening new trades, learning new skills or just spending time with their family.

The fact that markets like TASE are embracing this technology is a huge deal for blockchain and for everyone who is involved in the markets trading, or any sort of financial service that can be conducted through blockchain. It means a completely different experience for everyone involved, concerning not only the lower price point but a faster transactions and more convenience.

Image courtesy of The Jerusalem Post

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