[The article has been updated to include NRI's collaboration with SBI Sumishin]

Japan Exchange Group, Inc. (JPX) and Nomura Research Institute (NRI) have come together to start conducting proof of concept (PoC) tests for blockchain, or distributed ledger, technology.

The news follows similar announcement made by JPX in February this year about conducting PoC tests for blockchain, in cooperation with IBM Japan.

Blockchain and distributed ledger technologies are increasingly gaining attention all over the world. They are being considered as one of the most promising aspects of Fintech that could be applied to constructing shared infrastructure to provide high availability and reliability at low cost.

However, the technology is still at a very early stage and there are issues to be resolved – it will need to be continually verified and improved before actual application in financial business operations takes place.

“JPX will conduct PoC test in cooperation with Nomura Research Insitute to evaluate the limits and possibilities of the technology in markets that have low transaction data volume”, the release said.

JPX, established via the business combination between Tokyo Stock Exchange Group and Osaka Securities Exchange in January 2013, provides integrated and reliable market infrastructure for financial instruments. In addition, it also provides clearing and settlement services through a central counterparty and conducts trading oversight to maintain the integrity of the markets.

Nomura Research Institute (NRI), a leading think-tank and systems integrator in Japan, has been showing interest in blockchain technology lately. Last October, it announced that it will examine the feasibility of implementing blockchain in the securities industry, in efforts to start facilitating open innovation. Later in December, it announced that it will develop a PoC for implementing blockchain technology with banking, in collaboration with SBI Sumishin Net Bank, Ltd. (SBI Sumishin).