IBM has announced that SBI Securities is testing the potential of blockchain technology for a new type of bond trading system. Working in collaboration with IBM, SBI Securities intends to make blockchain technology for securities operations commercially available in the future.
SBI Securities intends to verify the potential of applying blockchain technology to bond trading operations, scrutinize barriers or complexity in using the technology for its operations, and prepare to apply the technology to actual operations.
Using the Hyperledger Fabric, SBI Securities will test the entire product cycle of registering a bond until its reimbursement; improved efficiency and automation of operations by sharing databases; possibility of reduced infrastructure costs by sharing among the parties involved; possibility of substituting the existing operational processes; evaluation of blockchain technology for securities operations and systems.
“This test aims to scrutinize barriers or complexity for practical use, develop a plan for deployment, and accumulate knowledge through applying blockchain technology to our products,” said Hiroyuki Ogawa, Executive Officer of SBI Securities. “Adopting the Hyperledger Fabric, an open technology platform, and working together with IBM Japan, the leader in this area, we expect that this verification test will speed the rate of adoption of blockchain technology in the financial trading area.”
A recent IBM study, “Blockchain Rewires Financial Markets: Trailblazers Take the Lead”, found that trailblazers, or early adopters, identified equity and debt issuance as one of four areas that should benefit most from the process improvements introduced by blockchain technology.
Asked where blockchains would best open up new transformational business models, trailblazers named equity and debt issuance (86%), clearing and settlements (82%), and wholesale payments (82%). A concentration of pilots in these areas is one indication that the financial markets industry may have been attracted first to those activities that may deliver significant business value whilst not subject to great regulatory complexity.
“As an innovative technology, blockchain has the potential to revolutionize ways businesses work together with their ecosystem of trading partners. The technology establishes accountability and transparency while streamlining business processes,” said Takeshi Fukuda, Director, IBM Research – Tokyo. “IBM is driving an open source, open standards blockchain fabric and community through the Hyperledger Project, and leverages this technology to transform businesses in various industries.”
IBM Japan will support SBI Securities by providing access to its global resources including IBM Bluemix Garage for Blockchain in Tokyo, IBM Consulting Services and IBM Research expertise in Japan.
IBM says it is rapidly expanding its blockchain consulting services and capabilities and actively working with clients to understand what it takes to make blockchain ready for business. Through its open source contributions and resources for blockchain software developers, IBM is advancing the science of blockchain, helping to remove complexity, and making it more accessible and open. Financial services, supply chains, IoT, risk management, digital rights management and healthcare are some of the areas that are poised for dramatic change using blockchain networks.