Today, Mizuho Bank, Fujitsu and Fujitsu Laboratories announced that they have completed to conduct a joint operational trial using blockchain technology. The trial was conducted from December 2015 to February 2016.
The goal was to enable low-cost, low-risk cross-border securities transactions by building a system utilizing blockchain technology that 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. This would thereby shorten the time from trade execution to final settlement from the previous three days to the same day. Due to the complexity of the process for cross-border securities transactions, it usually takes three days from trade execution to final settlement.
Combining Mizuho Bank’s expertise in post-trade processes as a leading Japanese custodian bank with the expertise of Fujitsu and Fujitsu Laboratories in designing and building payment systems, as well as in applied blockchain technology, the companies plan to utilize their respective strengths to create an exceptionally convenient financial system that reduces the risks associated with cross-border securities transactions, such as price fluctuations.
Using the blockchain Open Assets Protocol, the three companies built a blockchain-forming system in Fujitsu’s cloud environment, recording 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. In the system, continuously generated blocks containing trade information were chronologically linked as blockchain, becoming information that could not be tampered. And, because the information could be shared between multiple companies, the partners confirmed that it was possible to shorten the time required in the post-trade process.
The three companies will 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.
(Source: Mizuho Bank )
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