European Central Bank’s (ECB) division of Directorate General Market Infrastructure and Payments and the Payment and Settlement Systems department of the Bank of Japan have agreed on a joint research project that explores the possible use cases of blockchain or distributed ledger technology for market infrastructure.

The collaboration will help in defining how new technologies can change the global financial ecosystem of today and ensure that central banks are adequately prepared, the release stated. The project is expected to release its key findings next year.

ECB executive board member Yves Mersch presented a speech at the ‘Handelsblatt Annual Conference Banken-Technologie’ in Frankfurt. His speech outlined the ECB’s position on the distributed ledger technology (DLT), discussed possible scenarios for blockchain adoption and shed light on  a global interaction between central banks in the field of DLT.

“As new technologies don’t stop at borders, we have furthermore decided to cooperate with the Bank of Japan to explore the potential future use of DLT for central banking services in a more global context,” Mersch stated. “We are on a journey which could radically alter the financial ecosystem as we know it. The ECB is committed to being part of this journey,” he concluded.