(Kitco News) - The Tel Aviv Stock Exchange has announced its intentions to develop a new platform for trading digital assets and will employ a five-year strategy to make it a reality.
“We see in the next five years a critical window of opportunity for the integration of the Israeli Stock Exchange in the technological revolution that the world's capital markets are going through,” Itai Ben-Zeev, CEO of the exchange, said in the press release.
The Stock Exchange has developed a strategic plan for the years 2023-2027, during which it will focus on four main objectives: “developing and strengthening the value proposition of the stock exchange's core activity; deepening and development of the direct activity with the end customers; entering the crypto worlds and establishing a platform for digital assets based on blockchain; and the development and sale of technological services and solutions for foreign exchanges.”
Through the implementation of new and innovative technologies into its infrastructure, the exchange looks to strengthen its international profile and attract foreign investors by increasing the supply of international products traded and cleared on the platform.
It also intends to strengthen its “liquidity strategy and the derivatives market including the relaunch of the futures contracts.”
The new service will provide direct services to institutional investors and market players and offer stock exchange clearinghouse services to institutional investors that will enable them “to face some of the challenges in the market and perfect the local capital market, reduce costs, reduce the existing concentration in the financial world and encourage the competition.”
The program's overarching goal is to support TASE’s value proposition by establishing a blockchain-based platform that integrates crypto, including “DLT technologies, tokenization of digital assets of various types and smart contracts.”
To achieve its goals, the exchange plans a restructuring that will see the creation of a holding company under which various subsidiaries will operate, “including existing and dedicated subsidiaries that will be established to realize the goals of the program.”
TASE also intends to “examine a plan for acquisitions and/or strategic investments in its areas of activity and/or in areas with added values.”
To achieve its goal, the management of the stock exchange has indicated that it needs to achieve an average annual growth rate (CAGR) of approximately10-12% over the next five years.
|
| Israel to test new blockchain-based digital bond system |
The new plan follows the successful completion of the previous five-year strategic plan, which helped position the stock exchange as a key and active player in the Israeli capital market, helped it become a profitable public company, demonstrated that the exchange could develop service and sales processes and improved its organizational efficiency.
As a result of the above changes, the rate of operating profit-adjusted revenues more than doubled from 9% in 2017 to a rate of nearly 25% in the first half of 2022. It also saw a growth rate of 7.5% in revenue from services between 2017-2021 as compared to an increase of 4% per year in the rate of operating expenses during the same period.
This latest development follows last week's announcement from the Israeli Ministry of Finance's Office of the Accountant General and the Tel Aviv Stock Exchange that they will be collaborating to test out a new blockchain-based digital bond system as part of its efforts to modernize the country’s financial markets and reduce associated costs.
