Blockchain is on the roll!
Japanese custodian bank Mizuho Bank, Fujitsu Limited and Fujitsu Laboratories has announced that they have completed their trial for the use of blockchain technology in cross-border securities settlement which began in December last year.
The trial was aimed to use the technology to improve the efficiency of their systems, including finding ways to reduce the 3-day delay for the clearance of cross-border securities transactions. The blockchain technology has been notoriously used in the finance sector as it provides a faster, cheaper, lower risk and more efficient system for their legacy infrastructure.
According to the press release, the trial is conducted through the Open Assets Protocol whereby the three companies utilised Fujitsu’s cloud environment to build the blockchain-forming system.
Going forward, the companies will be carrying on with further trials to explore other applications of the blockchain technology in their trading settlement systems.
A common misconception of the blockchain technology is how it is thought to be solely related to cryptocurrency. In actual fact, while the basis of cryptocurrency is built upon the principles of blockchain, the use of the technology can be extended to industries beyond just finance.
Nonetheless, the financial services sector still leads in the utilisation of blockchain as the need for faster, cheaper and more efficient systems are desperately required for reforms.
Some notable examples include Nasdaq’s work on testing out the technology in Estonia on the Tallinn Stock Exchange (TSE) as well as their successful completion of issuing securities to an investorthrough blockchain earlier this year.