You can soon be trading crypto on the Tel Aviv Stock Exchange

The Tel Aviv Stock Exchange’s published roadmap for 2023-2027 covers blockchain technology and asset tokenization.

On October 24, 2022, the Tel Aviv Stock Exchange (TASE) released a strategic plan for 2023-2027 after being approved by the board of directors and management.

Blockchain and Tokenization Key Goals

The new plan focuses on four forward-looking areas, which include offering crypto products directly to institutional investors.

First, TASE seeks to increase its core business value through four initiatives. It intends to improve its product range to attract foreign investors. The exchange will also look to strengthen its derivatives offerings and improve its systems to clarify and report over-the-counter (OTC) transactions. It seeks to improve distribution channels to existing customers.

Second, TASE seeks to improve the sharing of its digital capabilities and analytics. To do so, it seeks to create new virtual assets and services that cater to institutional clients and liquidity providers. It hopes that these efforts will improve the efficiency of its customers and encourage competitiveness.

Third, TASE wants to tokenize traditional assets and implement blockchain technology. Accordingly, on October 19, 2022, TASE and the Accountant General decided to pilot a tokenized government bond issuance using blockchain, smart contracts and tokenization. TASE will also consider upgrading existing infrastructure to the new Web3 or Blockchain standards and offering a product tracking a basket of crypto assets.

Finally, it wants to promote its Israeli technology by marketing it to smaller exchanges.

Tel Aviv Exchange joins growing group of institutional interests

While crypto was designed to be decentralized, many customers feel comfortable accessing them through traditional companies.

For example, the world’s largest derivatives exchange, CME Group, has launched several crypto-derivatives products. The company is an established player in the derivatives market, having introduced its first futures contracts in 1961. So it came as no surprise that when it launched its first bitcoin futures offering in December 2017, bitcoin hit an all-time high of $19,423.58. ETH also rose to $728.70 before reaching $1,448.18 in January 2018. Furthermore, after ProShares launched its Bitcoin Futures ETF in October 2021, both ETH and Bitcoin began to rally and reached their all-time highs in November 2021.

According to Mastercard’s chief digital officer, consumers want crypto exposure but feel better off going through a trusted intermediary such as a bank. Accordingly, the payment provider announced on October 17, 2022, that it will be conducting a project in 2023 to help customers trade crypto assets through their banks. The crypto assets will come from an exchange called Paxos.

TASE has three foreign bank members

By bringing digital assets and tokens under its banner, the Tel Aviv Stock Exchange gives the crypto space an air of credibility. It is a highly-regulated institution and operates under a license granted by the Finance Minister of the country. The Israel Securities Authority oversees the exchange, including the TASE Clearing House and the Derivatives Clearing House. Clearing houses act as the central counterparty to the transaction, bearing the risk that a transaction party will not fulfill its obligation.

Banks that are members of TASE are overseen by a unit of the Bank of Israel, which provides another layer of security to the public. The public can only access TASE’s products through its members. Three foreign banks are TAS members: Barclays Bank plc, Citibank and HSBC Bank plc. But if the company’s roadmap is successfully implemented, it could result in more foreign banks getting involved.

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