Mizuho Financial Group announced today that it has tested the use of a digital currency-based, blockchain settlement system.

The project, built in partnership with IBM, is notable given the emphasis financial incumbents have placed on using distributed ledger solutions for settlement in which information, not any finite digital asset, is shared among participants.

For example, the news follows reports that blockchain post-trade provider Cryex is struggling to gain regulatory approval for a similar, cryptocurrency-based settlement service.

However, the company's release did not discuss regulatory challenges with the project, instead focusing on illuminating its design and intent.

Mizuho’s test was created through the use of IBM’s blockchain services platform, announced in February.

IBM's summary of the news reads:

Today Mizuho Financial Group announced it is working with IBM to use blockchain technology for payment settlements using the bank's own virtual currency in a project that will explore how payments can be instantaneously swapped. This is one of several ways the bank is exploring the use of blockchain and creating a platform across the bank using the Linux Foundation Hyperledger code.

By putting blockchain through a number of rigorous tests, the bank is gaining confidence in its use and sharing their learning with the financial community. With the virtual currency pilot, the bank expects to better understand how the settlement process can be simplified in a private, secure and permissioned blockchain network.

Using its own virtual currency that trades 1:1 with the Yen in a secure environment could potentially provide better tracking and control of the exchange of funds, and eliminate some of the expenses associated with the exchange of paper-based currency.