Blockchain Pilot Completed by Daiwa Securities Group in Japan, Employing Proof-of-Concept (PoC)
Daiwa Securities Group is the second largest securities brokerage in Japan, so it should not come as any surprise that they have been testing out distributed ledger technology for their own use.
Recently, in a press release yesterday, the company announced that they had completed a blockchain proof-of-concept (PoC) pilot.The use of this PoC used blockchain technology in post-trade processing, breaking down the pilot into two since-completed steps.
The project was titled “JPX Proof-of-Concept Testing for Utilization of Blockchain / DLT in Capital Market Infrastructure,” and it was a collaborative effort between 26 companies. The company included institutional investors, financial institutions, and system providers. Optimally, this pilot was meant to improve the post-trade process with the use of blockchain technology.
In the results of this pilot, the costs associated with operation and development are expected to be reduced, based on the improvement of workflow processes and standardized specification implementation with blockchain technology. The press release stated that Daiwa Securities Group
“believe[s] that the standardization will also generate considerable benefits to the investors who are the ultimate beneficiaries.”
In order to use blockchain in the implementation of the standardized system, more practical considerations will be required for widespread use by other companies. The release continues,
“We may need to develop a new organization or a consortium which holds responsibility of the system development and administration, budget management and fund development. We are going to discuss more about the framework of collaboration with the market participants and to conduct feasibility study in order to put this concept […] into action.”
Considering that there are certain limits in the blockchain, the group commented that they will require advanced information security and greater time efficiency in its various functions to meet the needs of their users. However, they added,
“We will continue to work for [the] realization of this plan through further coordination with all the related companies.”
Yesterday, the second-largest bank Japan by assets, Sumitomo Mitsui Banking Corporation, choose to conduct a PoC as well, but with the Marco Polo trade finance platform from R3. With this project, the company hopes to improve trade processing efficiency,
In another report in Japan yesterday, the central bank made the results of its recent research public, regarding the introduction of digital currencies from banks into the current monetary system.