BOJ, ECB team up on blockchain research
Central banks eye bitcoin backbone for market infrastructure
TOKYO -- The Bank of Japan and the European Central Bank will jointly research the possible use of blockchain technology -- the foundation of digital currency bitcoin -- in market infrastructure, seeking to gain expertise and stay on top of the cutting-edge tech.
"Together with the Bank of Japan, [the ECB] agreed to launch a joint research project," ECB Executive Board member Yves Mersch said in a Tuesday speech.
The central banks will assess trends in the technology and conduct experiments to evaluate the specifics of launching a blockchain-powered system, such as one for settling transactions involving bonds or other financial instruments. They expect to announce the results next year.
The BOJ has conducted similar experiments with domestic and foreign information systems businesses before. In order for blockchain technology to spread, providers will have to grapple with such issues as achieving higher processing speeds and ensuring information security.