Japanese financial giant Mizuho has been working with Fujitsu, as well as Fujitsu Laboratories, on a blockchain-based cross-border securities settlement system for the past few months.

According to today’s press release, the system was built using the Open Assets Protocol, which uses colored coins technology to designate minute amounts of bitcoin as assets on bitcoin’s blockchain. The trial has been running since December of last year and was completed in February of 2016.

The join venture was aimed at leveraging blockchain tech to reduce the current three-day delay associated with the settlement of international trades, and to also eliminate the risk of price fluctuations.

“As the asset manager is exposed to such risks as price fluctuations if the counterparty goes bankrupt during the period between executing the trade and completion of the settlement, it is desirable to shorten the settlement process.”

Mizuho Bank – which clears millions of securities trades on a daily basis – dealt with implementing the post-trade settlement procedures of the trial. Fujitsu Limited developed and tested the system, while Fujitsu Laboratories conducted the actual trial of the cross-border trading system.

The trial showed that a blockchain systems are far superior to legacy clearing systems due to the fact that “information could be shared between multiple companies” in real time, which eliminates the need for parties on either side of the transaction to manually verify the details.

The press release also mentioned that Mizuho and Fujitsu will be conducting additional trials this month to better investigate the application of blockchains in international trade settlement.

“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.”

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