Japanese technology firm Fujitsu Limited, and subsidiary Fujitsu Laboratories Ltd., along with bank Mizuho Bank, Ltd. have announced that they have successfully completed a trial of a Blockchain-derived platform for carrying out cross-border securities transactions.

The trial, which ran for two months and finished at the end of February, was aiming to see whether using distributed ledger technology could slash the current three day time period for carrying out these transactions to the same day.

Goals included a system that was low-cost, low-risk, and can almost instantly share matched trade information in the post-trade process as data that cannot be tampered with, but without building a large-scale settlement system from scratch.

The system built used the Blockchain Open Assets Protocol that recorded the information from a confirmation (matched trade information: securities name, quantity of securities, currency code, amount, country of settlement, settlement type, settlement date) as one linked block.

“Previously, there have been attempts to reduce the number of days required for settlement by eliminating this sort of complicated instruction checking process and sharing data through centralised management,” Mizuho Bank said in a statement “However, issues such as the large cost of system operations management made the initiative impractical.”

The system continuously generated blocks containing trade information that were chronologically linked in the Blockchain and as that information could be shared between multiple companies, the partners confirmed that it was possible to shorten the time required in the post-trade process.

Going forward

Given the successful trial all three companies said that they would use the results obtained in this operational trial “to consider further the path to practical application of Blockchain technology to cross-border securities transactions from March 2016,” or in more basic terms, given the successful trial they’re likely to implement either a longer trial, or even look at implementing the system permanently.

This isn’t the first time the Blockchain has been utilized in this fashion, with the Australian Stock Exchange (ASX Ltd.) working with Digital Asset Holdings, Inc. on such a system, and the R3 Consortium is working with banks across the globe on ways to use the Blockchain in everything from intra-company transfers, through to international transfers of actual funds.

What the trial does represent though it the growing acceptance of the Blockchain as the building block of 21st century fintech; Mizuho Bank is the 22nd largest bank with the world with assets of $1.343 trillion so this isn’t a case of a bit player taking a look at the technology, but a serious player in the world of banking.

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