The Israeli Ministry of Finance, together with the Tel Aviv Stock Exchange (TASE), digital asset custody provider Fireblock, and American software solutions developer VMware, will carry out tests of a blockchain-backed platform for trading digital bonds. These bonds will be issued by the Ministry of Finance.
The news appeared in the local media on October 19. With the name of Eden, the new project aims to reduce costs and optimize the procedure for issuing national bonds. As accountant general Yali Rothenberg told the public:
“I believe that blockchain-based technologies are here to stay and will eventually permeate the core of financial markets, profoundly and profoundly disrupting them. It is our duty to constantly examine new technologies and methodologies.”
During the real-time test, Participating banks will receive a new series of tokenized government bonds in their e-wallets through the project’s platform, transferring the money in digital currencies to the Israeli government’s e-wallet. There is no information on the specific digital currencies to be used in the live test. The pilot project is expected to end at the end of the first quarter of 2023.
The list of countries and international organizations that have digitized their bonds is not long. The World Bank for Reconstruction and Development and the Commonwealth Bank of Australia became pioneers as early as 2018, raising $110 million for two-year blockchain bonds. In 2021, the European Investment Bank followed suit by issuing €100 million in digital bonds.
While the most prominent national example is El Salvador, which links its “Bitcoin bonds” to a broader cryptocurrency-focused development strategy, Colombia and the Philippines have also immersed themselves in digitizing government bonds. In 2022, the UK stated its intention to explore blockchain for government bonds as well.
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