The Tel Aviv Stock Exchange (TASE: TASE) and the office of the Accountant General at the Israeli Ministry of Finance are proud to announce the successful completion of the Proof of Concept (PoC) phase for Project Eden, a groundbreaking collaboration showcasing the immense potential of innovative technologies such as DLT, smart contracts, and tokenization in reducing risk and improving efficiency and transparency in the 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 partnership with the Israeli Ministry of Finance. The collaborative team has dedicated substantial effort and expertise to examine the application of blockchain infrastructure in the issuance and settlement of digital government bonds.
The highly anticipated go-live event held on May 31, 2023 at the Tel Aviv Stock Exchange brought together prominent banks, both international and local (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 go-live event, the Ministry of Finance issued and minted the first dummy digital governmental 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. Utilizing smart contracts and the ERC-20 token standard, the Payment Token represented one Israeli Shekel within 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 aligns with ongoing projects led by central banks worldwide, as they explore the integration of CBDCs into traditional financial systems.
The settlement process was done through ‘Atomic Settlement’ between the Security Tokens and Payment Tokens, 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 go-live event demonstrated the successful implementation of advanced technologies, showcasing 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 enhance efficiency, reduce operational risks, 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 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 advancements and innovations in the financial industry.
Yali Rothenberg, The Accountant General, Ministry of Finance: "The Accountant General's Office places great emphasis on the use of advanced technologies to improve the functionality of financial markets, and to provide better services to businesses and citizens alike. “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, streamlining, and accessibility of the financial system for the benefit of the general public. I wish to congratulate the Finance Division in the Accountant General's Office and the Tel-Aviv Stock Exchange, for paving the way with the successful completion of the Project Eden proof-of-concept and look forward to continued fruitful cooperation".
Gil Cohen, Senior Deputy to the Accountant General and Head of Finance Division, 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 an atomic clearance, over a dedicated blockchain-based platform. The proof-of-concept was conducted with the help of representatives from leading global and Israeli banks. While everyday use of this technology to finance government debt is still in the future, we believe that this demonstration promotes the technological and regulatory discourse by all relevant parties to continue progressing towards a shared goal of improving the accessibility of financial markets for all."
Ittai Ben Zeev, TASE CEO: "Project Eden is very important for the Tel Aviv Stock Exchange. We believe that the 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 the capital market information will be completely different in a few years, and it is 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 are also impacting traditional systems. By leveraging blockchain technology, smart contracts, and tokenization, we have the potential to enhance traditional capital markets, making them more efficient, faster, and less risky. This has the power to revolutionize the way we conduct business. By harnessing this technology, traditional exchanges can create new business models, ultimately improving the services we provide to our valued investors and clients."
“Fireblocks is incredibly proud of our collaboration with TASE, the Ministry of Finance, VMWare, and Blockfold,” said Michael Shaulov, Co-founder & CEO of Fireblocks. “The success of the Live Day event brought what we all imagined into reality - the interaction across wallets and token standards allowing for the near-frictionless issuance and trading of treasury bonds. We applaud TASE’s forward-looking vision and eagerly anticipate for what’s to come.”
BlockFold CEO & Co-founder, Francois Schonken, said: “It has been a privilege to partner with Fireblocks to contribute to TASE and the Accountant General’s Proof-of-Concept Project Eden. Digitizing the Financial System, One Bond at a Time”. The immense success of Project Eden, evidenced, in no small part, by the in-person participation of all 12 invited primary dealers during the Live Day in Tel Aviv, could be attributed to the clarity of vision and tireless dedication of the TASE and Accountant General team. We are excited to see what is next on their tokenisation journey.”
POC Team, Credit Liat Mendel
