Monday, January 30, 2023
  • Paves the way for trading digital currencies and cryptocurrencies on Israel’s Tel Aviv Stock Exchange (TASE)
  • The exchange made a press release on its 2023-2027 development strategy, which will focus on the integration of web 3.0 technology
  • African authorities may yet learn from Israel

Israel’s Tel Aviv Stock Exchange (TASE) will implement blockchain technology on the exchange enabling the trading of cryptocurrencies. The exchange made a press release on its 2023-2027 development strategy, which will focus on the integration of web 3.0 technology to move the exchange forward. The plan is still some way off but will, at the very least, make it possible to trade digital currencies on the Tel Aviv Stock Exchange.

Tel Aviv Stock Exchange Press Release

No clear dates were given in the press release for the exchange’s full implementation of blockchain technology. However, the development paves the way for trading digital currencies and cryptocurrencies on the exchange. CEO Ittai Ben-Zeev oversaw the successful implementation of the 2017-2022 strategic plan, including the move from a non-profit platform to a profitable public company.

According to the press release TASE will create a platform for digital assets using blockchain technology and venture into cryptocurrency trading. This will include the tokenization of various digital assets and smart contracts through Distributed Ledger technology. Many academics have explored the application of DLT to financial markets, outlining both the benefits and risks of such an approach.

Israel’s technology focus

Israel is a known world leader in many technologies, including the digital and agriculture sectors. If successfully implemented, the approach can form a useful case study for African capital markets, which have the potential and capacity to implement blockchain technology in capital markets.   As we can imagine, this should include applying DLT to existing financial and other emerging digital assets. Israel has exported much of its technological advancements to the world, and there’s no reason the application of blockchain technology to regulated capital markets should be treated any differently. The opportunity to buy and sell cryptocurrencies on registered and recognised exchanges is appealing.

Applying Blockchain technology to capital markets a win for Israel

The benefits of applying DLT go beyond market and backroom improvements to operations. TASE has identified two additional benefits in its 2023 to 2027 plan. Firstly the improvement of the value proposition to market participants. Particularly in improving the breadth and depth of products offered to participants. This includes offering more international products, the biggest hint that cryptocurrencies are definitely in Israel’s stock exchange plan.

Thanks to digital technology, many products worldwide have moved to a direct access status quo. While it may not be the most popular example, capital market investing is a good example of this at work. The famous, if not infamous, Robin Hood controversy of 2021 is a testament to this. Many African countries such as Botswana, Ghana, Nigeria, South Africa, Zimbabwe and Zambia now have complete online access to capital market investing.  So the idea of direct trading of cryptocurrencies and digital currencies through stock exchanges is not that far from implementation in Africa.

African authorities may yet learn from Israel

Regulatory concerns have held back the adoption of cryptocurrencies in many African countries. South Africa currently leads the pack in regulatory adoption, while countries like the Central African Republic are treading their own path with the adoption of Bitcoin. Namibia’s recent clarification allowing cryptocurrency payment settlements between willing parties is one of the few positive developments coming out of the block.

The dilemma for African authorities is precarious when it comes to cryptocurrency. If they do not move, citizens will suffer at the hands of bad actors, as we saw in the prevalence of cryptocurrency-related scams most recently highlighted by the Obelisk multiplication scheme collapse in South Africa. On the other hand, if they move too fast, they risk opening up to unknown possibilities. Getting left behind is no longer an option. Globalization and the increased interconnectivity of the world leave very little distance between a person in New York, Mauritius or Mongolia in certain aspects.

5 years is admittedly a long time, but with the seeds already sown, the steps towards trading cryptocurrencies on the TASE, an internationally recognised government-regulated stock exchange, could start materialising soon.

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