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Proponents argue that blockchain can make transfers across borders instantaneous and make the financial system far more efficient

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The Bank of Canada is partnering with TMX Group and Payments Canada to explore how blockchain technology could be used to speed up the clearing and settling of securities.

Blockchain technology, which underlies cryptocurrencies such as Bitcoin, allows data and assets to be transferred online without the need for intermediaries. Transactions are recorded using cryptography and stored in a distributed ledger.

The central bank's senior deputy governor Carolyn Wilkins announced the initiative at the SIBOS conference in Toronto Tuesday.

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The project marks the third phase of the central bank's Project Jasper research initiative, which was launched in March of 2016.

The first two phases of the project focused on the clearing and settlement of high-value interbank payments using distributed ledger, or blockchain, technology.

The third phase will involve creating a proof of concept for the automation of the securities settlement process.

Ms. Wilkins added that the Bank of Canada is also studying whether the central bank should issue its own digital currency.

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