TASE to create blockchain securities lending platform
17 May 2018 Tel Aviv
Image: Shutterstock
Tel Aviv Stock Exchange (TASE), professional services group Accenture and global financial technology (fintech) innovation centre The Floor, are to develop a new blockchain securities lending platform powered by Intel.
TASE said this makes it the first global player in the Israeli market to embed this cutting-edge technology into its operating business, utilising it as the technological basis of a new securities lending platform.
There is currently no central securities lending platform in the Israeli market, TASE said. Securities lending is at present executed in the capital market, primarily using inter-bank mechanisms within, and if necessary outside, banking group limits.
As a result, it added, the market has not been fully exploited to satisfy the potential needs of economic agents.
TASE said the purpose of this project is to create one central platform that will transform the country’s securities lending market by enabling direct lending among all the major financial instruments.
This platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions, it said.
The use of distributed ledger technology (DLT) as the basis of the new trading platform will harness some of the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability, said TASE.
All of these are expected to benefit it, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.
The co-operation originated in March last year during an international blockchain hackathon and quickly transitioned to a concrete opportunity, explained TASE. The project is structured with a two-phased approach comprising an initial proof of concept (PoC), which upon its success will be followed by a deployment of the solution in a production environment.
Hyperledger Sawtooth is the infrastructure on which the project is based—an enterprise blockchain platform for building DLT applications. Intel worked with Accenture and TASE and The Floor to deliver a private ledger on Hyperledger Sawtooth that utilises Intel Software Guard Extensions (Intel SGX) technology to encrypt transaction data.
This helps keep data private among transaction participants and provides closed DLT platform members with additional confidentiality capabilities, said TASE.
TASE said that Accenture is leading the initiative by providing project management, systems integration, blockchain and cybersecurity consulting services to support the securities lending platform. The company will play a key role in the development of the platform’s Smart Contracts, one of Hyperledger Sawtooth’s main business attributes.
Ittai Ben-Zeev, TASE’s CEO, said: “The blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform.”
Gil Devora, co-founder, The Floor, added: “TASE is the first stock exchange in the world to pilot and use the platform. In the future, this platform and its cutting-edge technology will be offered to global custodians, stock exchanges and other asset management firms looking to deploy a robust and operational system for securities lending or other asset classes.”
Jacob Benadiba, Accenture’s country managing director for Israel, said: “Blockchain technology is poised to bring sweeping innovation to the global capital markets infrastructure, and this project shows how rapidly this technology is taking hold around the world. This project will help TASE create an innovative end-to-end solution that addresses their business, security and technological needs under an extremely powerful new paradigm.”
Rick Echevarria, vice president, software and services group, general manager, platforms security division at Intel Corporation, said: “Intel believes blockchain can transform business processes, and Intel SGX technology is an important enabling technology for blockchain solutions.”
TASE said this makes it the first global player in the Israeli market to embed this cutting-edge technology into its operating business, utilising it as the technological basis of a new securities lending platform.
There is currently no central securities lending platform in the Israeli market, TASE said. Securities lending is at present executed in the capital market, primarily using inter-bank mechanisms within, and if necessary outside, banking group limits.
As a result, it added, the market has not been fully exploited to satisfy the potential needs of economic agents.
TASE said the purpose of this project is to create one central platform that will transform the country’s securities lending market by enabling direct lending among all the major financial instruments.
This platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions, it said.
The use of distributed ledger technology (DLT) as the basis of the new trading platform will harness some of the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability, said TASE.
All of these are expected to benefit it, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.
The co-operation originated in March last year during an international blockchain hackathon and quickly transitioned to a concrete opportunity, explained TASE. The project is structured with a two-phased approach comprising an initial proof of concept (PoC), which upon its success will be followed by a deployment of the solution in a production environment.
Hyperledger Sawtooth is the infrastructure on which the project is based—an enterprise blockchain platform for building DLT applications. Intel worked with Accenture and TASE and The Floor to deliver a private ledger on Hyperledger Sawtooth that utilises Intel Software Guard Extensions (Intel SGX) technology to encrypt transaction data.
This helps keep data private among transaction participants and provides closed DLT platform members with additional confidentiality capabilities, said TASE.
TASE said that Accenture is leading the initiative by providing project management, systems integration, blockchain and cybersecurity consulting services to support the securities lending platform. The company will play a key role in the development of the platform’s Smart Contracts, one of Hyperledger Sawtooth’s main business attributes.
Ittai Ben-Zeev, TASE’s CEO, said: “The blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform.”
Gil Devora, co-founder, The Floor, added: “TASE is the first stock exchange in the world to pilot and use the platform. In the future, this platform and its cutting-edge technology will be offered to global custodians, stock exchanges and other asset management firms looking to deploy a robust and operational system for securities lending or other asset classes.”
Jacob Benadiba, Accenture’s country managing director for Israel, said: “Blockchain technology is poised to bring sweeping innovation to the global capital markets infrastructure, and this project shows how rapidly this technology is taking hold around the world. This project will help TASE create an innovative end-to-end solution that addresses their business, security and technological needs under an extremely powerful new paradigm.”
Rick Echevarria, vice president, software and services group, general manager, platforms security division at Intel Corporation, said: “Intel believes blockchain can transform business processes, and Intel SGX technology is an important enabling technology for blockchain solutions.”
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