The Israeli Ministry of Finance will take a test of a blockchain-backed platform for digital bond trading. Israel will conduct this test along with Tel Aviv Stock Exchange, the United States software solutions developer VMware, and digital assets custody provider Fireblock. The issuance of bonds will also be done by the Ministry of Finance.
This news came on the 19th of October in the local media, in which there is an indication that the new project is intended to reduce costs and optimize the procedure of national bond issuance.
Yali Rothenberg, the accountant general of the state of Israel, told the public that he believes that blockchain-based technologies are here to stay. He believes that over time it will permeate the core of the financial markets, thoroughly and deeply altering them. He advised people that they have to examine new technologies and methodologies constantly.
During the test, the participant’s banks in this test will receive a new series of tokenized government bonds on their e-wallets through the project platform. These participants will also transfer the money held in digital currencies to the Israeli government’s e-wallet. However, there is no information about the digital currencies that are going to be used in that test.
Several international participants have digitalized their bonds, such as the World Bank for Reconstruction and Development and the Commonwealth Bank of Australia raised $110 million for two-year blockchain bonds in 2018. European Investment Bank is also in this list which issued 100 million euros in digital bonds.
The best example of digital bonding is in El Salvador, which tied its Bitcoin bonds to a larger crypto-centered strategy of development. The Philippines and Colombia are also in the race to digitalize government bonds. In 2022, the United Kingdom also showed interest in exploring blockchain for government bonds.
