The European and Japanese central banks announced today a new collaboration for the mutual advancement of their respective economies based on innovation. The Directorate General Market Infrastructure and Payments of the European Central Bank and the Payment and Settlement Systems Department of the Bank of Japan have agreed to launch a joint blockchain research project.

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The Euro-Japanese research project, which aims to study the possible use of distributed ledger technology for market infrastructure, is expected to release its main findings next year.

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Japan is heavily involved in the developing and testing of blockchain technology both on the banking-corporate side and on the governmental-institutional side. For example, just a week ago the Tokyo Stock Exchange, Inc. (TSE) announced that TSE, Osaka Exchange, Inc. (OSE) and Japan Securities Clearing Corporation (JSCC) will form a consortium of Japanese financial institutions to continue proof of concept (PoC) testing and discuss the possibility of applying blockchain technology to capital market infrastructure.

European authorities are mainly known in the cryptocurrency community for their hostility to bitcoin but they are more than open to blockchain technology itself. Earlier this year the European Securities and Markets Authority (ESMA) turned to the public asking for feedback on the application of distributed ledger technology with regard to securities markets. The regulator also published a discussion paper listing various possible benefits, shortcomings, challenges and risks that it identified with blockchain technology.