Nomura Research Institute (NRI), a Japanese provider of system solutions and consulting services, is launching a program to develop a proof of concept (PoC) that would help implement the blockchain technology with banking.

SBI Sumishin Net Bank Ltd., an Internet banking firm, and Dragonfly Fintech Ltd., a blockchain expert, will collaborate with NRI in this project, writes the institute on its website. This is one of the first studies to be carried out in cooperation with an Internet banking company. The independent expertise of SBI Sumishin is supposed to double-check the efficiency of the PoC. Dragonfly Fintech will provide the researchers with all the technology connected with blockchain that may be needed.

Generally, a PoC is a small-scale model of a new technology that is supposed to test its operability. This PoC will check in what ways blockchain technology can be applied to banking. “The PoC will examine business scenarios and validation items, prepare prototype systems based on these anticipated business scenarios and materialize ways to apply blockchain technology for banking,” says the institute’s press release.

Dragonfly Fintech, which will technically assist NRI in its research, uses the NEM and Mijin blockchain platforms. Mijin, according to its website, makes it possible to create private blockchains, which is its main difference from the blockchain platform of bitcoin. NEM, developed by Makoto Takemiya, founder of Dragonfly Fintech, is based on the Proof-of-Importance (PoI) consensus mechanism, says its technical reference. This is a crucial difference from bitcoin’s blockchain that operates using Proof-of-Work (PoW). PoI doesn’t require perpetual use of large computing resources, because, unlike PoW, it doesn’t ask users to repeatedly run hashing algorithms. As a result, PoI claims to be environmentally sustainable.

This is not the first time NRI is dealing with blockchain. In October 2015 the institute initiated a study to analyse the possible implementation of blockchain into securities services. That research is to be completed in January 2016, and its practical application will follow.

Founded in 1965, NRI is an independent, global IT solutions and consulting services provider. “This PoC is a strong example of NRI's continued commitment to open innovation, through collaborations with various firms, to create new value in the marketplace,” said Minoru Yokote, Senior Managing Director of NRI.

Andrew Levich