According to a recent news release by the Israel Securities Authority (ISA), the regulator has started utilizing blockchain technology to improve cybersecurity and more effectively address challenges regarding information security.
The ISA was established in 1968 and seeks to ensure an efficient capital market based on transparency and fairness. The ISA models its practices on the basic tenets established by US securities law following the wake of the 1929 Wall Street Crash.
The Israel Securities Authority news release states:
“Blockchain technology in the Yael system adds an additional layer to the security of information conveyed by the ISA to the supervised entities. The technology confirms the authenticity of the messages, prevents fabrication and prevents the messages from being edited or erased. In addition, the system prevents the possibility of denying that messages were received from the ISA.”
In other words, the immutable nature of the blockchain is an excellent feature for the Israel Securities Authority Yael system. The incorporation of blockchain in the ISA’s information systems is in line with the regulator’s vision of nurturing capital market innovation and adopting technologies related to financial advancements. The ISA is clearly creating a regulatory innovation hub in the area of financial technology.
According to Natan Hershcovitz, director of the Information Systems Department at the ISA:
“We are witnessing a growing trend toward incorporating of innovative and pathbreaking technologies in the financial industry and in general. The implementation of Blockchain technology in the ISA’s information systems positions it as one of the leading government authorities worldwide in the security and reliability of information conveyed to the public and as one of the leaders in the public sector in Israel.”
This is a major advancement in the world of regulation as a national securities regulator acknowledges the efficiency created by blockchain technology.