Today, the Israeli Ministry of Finance and the Tel Aviv Stock Exchange (TASE) announced plans for a proof of concept to issue government bonds using blockchain. Protocol developer VMWare and custodian provider Fireblocks will be part of this Eden Project.

The objective of the project is to accelerate and reduce the cost of issuing and clearing government bonds, with the additional benefits of greater transparency and risk reduction.

The blockchain system will be developed by TASE and will include live testing with local and international banks, with settlement using digital currency in a state of Israel e-wallet.

“I believe that blockchain-based technologies are here to stay and will eventually permeate the core of financial markets, profoundly and profoundly altering them. It is our duty to constantly examine new technologies and methodologies,” said Accountant General Yali Rothenberg.

VMware previously participated in Bank of Israel CBDC technical trials with a novel privacy solution. The company has an enterprise blockchain powered by VMware Blockchain, which is also the ledger behind Australia’s ASX clearing and settlement system, CHESS.

The Tel Aviv Stock Exchange has considerable experience with blockchain, having launched a blockchain-based securities lending platform in 2020.

Several other governments around the world are exploring blockchain-based bonds. The British government recently announced plans to explore the issue. The Philippines and Thailand have issued retail government bonds using distributed ledger technology (DLT). Poland has used blockchain for government bond reporting, and Korea announced plans for a trial in 2020.

While not a government bond, the European Investment Bank issued a €100 million bond on the Ethereum blockchain last year.