The Israeli Government Will Test Blockchain-Based Bonds With TASE

• Israeli government and are collaborating with digital asset infrastructure firms.
• The participating banks will receive a new series of tokenized government bonds on their e-wallets.

A blockchain-based digital state bond is about to be released by the Israel Ministry of Finance and the Tel Aviv Stock Exchange (TASE). To conduct live testing of a new platform using smart contracts and tokenization for the trading and clearing of digital bonds, the Israeli government and TASE are collaborating with the companies Fireblocks and VMWare, which provide the infrastructure for digital assets.

The Pilot Project Expected to Be Completed by Q1 2023

In the live test, units of the digital bond will be distributed to the acquiring participants’ e-wallets and purchased using a digital currency that will then be transferred to the e-wallet of the Israeli government. The specific digital currencies that will be used in the live test are not disclosed. By the end of Q1 2023, the pilot project is anticipated to be completed.

In 2018, the Commonwealth Bank of Australia and the World Bank for Reconstruction and Development raised A$110 million for two-year blockchain bonds, respectively, and thus established themselves as pioneers. By issuing digital bonds worth 100 million euros in 2021, the European Investment Bank followed the trend.

Despite El Salvador being the most well-known national example, which links its Bitcoin bonds to a larger crypto-centered development strategy, Colombia and the Philippines have also dabbled in digitalizing the government bonds. The U.K. declared its intent to investigate blockchain for government bonds in 2022.