A group of Japanese financial institutions has successfully tested a prototype that uses distributed ledger technology (DLT) to streamline international transaction agreements.

Announced earlier this month, Nomura Holdings, Daiwa Securities, Mizuho Financial Group and Sumitomo Mitsui Banking Corporation used distributed ledger startup R3's Corda software to streamline an ISDA Master Agreement negotiation.

Published by the International Swaps and Derivatives Association (ISDA), the agreement is intended for over-the-counter (OTC) derivatives transactions internationally. The framework traditionally requires each party involved in the transaction to record and store the emails and documentations that are produced in internal coordination and external negotiation.

According to a statement, using the prototype, each time a transaction is recorded, the terms of the master agreement will apply automatically and do not need to be renegotiated, thus improving transparency and simplifying data management.

Mizuho Bank, Daiwa Securities Group and Nomura Holdings, previously joined a blockchain consortium formed by the Japan Exchange Group (JPX) last November, with a goal of testing a blockchain-based market infrastructure proof-of-concept. The project now has 26 members, including several key regulators such as Japans's central bank and the Financial Service Agency, the country's top markets watchdog.

Developed by R3, a consortium of global financial institutions, Corda is a distributed ledger platform providing APIs and codes for companies to build up blockchain-like applications. It has recently moved to its first public beta phase, marking a notable milestone that follows its launch in November 2016.

Japan roads image via CoinDesk