The financial arm of Japanese retail giant Aeon is to trial an IBM blockchain solution for settlements and transactions around Asia.

Aeon Financial Service provides banking, credit and microfinance services to customers in Japan and 11 other Asian countries. The project will result in a new IBM blockchain-based payments network, through which these services can be offered.

The solution will be developed on Hyperledger Fabric, an open source, Linux-based blockchain framework which has had good penetration in blockchain for trade finance and transaction banking.

It will allow Aeon to store and share transaction records on the blockchain, which will be governed by smart contracts. It will be underpinned by secure encryption technology, which will allow Aeon to form blockchain networks within its group of companies.

Through the solution, individuals and businesses will be also able to settle their financial transactions using virtual currency payments. A trial is expected in July.

“Based on settlements and transactions, Aeon Financial Service is working to build a platform that will offer various financial services such as virtual currency payments and loyalty points exchange and redemption not only to customers in Japan but also throughout Asia,” says Masaaki Mangetsu, managing director, global business strategy at Aeon Financial Service.

He adds: “We foresee great opportunities in using blockchain to build this platform, and will aim to use it to improve our current financial services offerings, as well as offering new services to underserved customers in Asian countries.”

IBM has been making in-roads in the trade and trade finance sectors with its blockchain offering. This week, it was announced that seven of Europe’s largest financial institutions would use Hyperledger Fabric, hosted by IBM, to launch an SME trade lending platform.

Partner for cognitive process transformation for IBM Japan, Yoshiki Minowa, says: “As an innovative technology, blockchain has the potential to revolutionise ways businesses work together with their ecosystem partners. The technology establishes accountability and transparency while streamlining business processes.”

At the GTR Australia Trade Forum in Sydney in May, IBM Australia’s CTO Mark Ebeling told delegates that we can expect to see more concrete developments in the blockchain for trade finance space this year, after months and months of exploratory work and pilots.

“I wrote a paper at the beginning of 2016 talking about the hype behind blockchain. The level of hype has only increased. But underneath the hype, businesses have actually been doing serious experiments with their partners to see how this tech can bring benefit now. There’s definitely a pathway there, real work going on. Next year we’ll see more, there’s now some cloud-based and secure platforms come to the market which means businesses can now start to do proper work on blockchain, or implementation of the blockchain,” he said.