The US-based technology giant has teamed up with Bank of Tokyo-Mitsubishi UFJ to use blockchain for contract management.

IBM has signed a contract with the Bank of Tokyo-Mitsubishi UFJ (BTMU) to examine the design, management and execution of contracts among business partners using blockchain technologies. 

The project is one of the first built on the Hyperledger Project fabric, an open-source blockchain platform, to use blockchain for real-life contract management on the IBM Cloud.

IBM and BTMU will begin by piloting blockchain to automate business transactions between the two companies. They have built a prototype of smart contracts on a blockchain to improve the efficiency and accountability of service level agreements in multi-party business interactions. The Japanese bank plans to begin using it to manage its contracts in fiscal year 2017. IBM and BTMU aim to use the system to manage agreements between themselves by the end of that year. 

“IBM continues to invest billions of dollars into research on emerging technologies that hold transformative potential for our clients. Blockchain will reinvent complex multi-party and contract-based business models, especially in banking and financial services,” said Bridget van Kralingen, senior vice president, IBM Industry Platforms. 

“This expands our expertise in helping clients identify the right projects and build out blockchain solutions to solve day-to-day business problems more effectively.”

Earlier this year, IBM announced the launch of the IBM Center for Blockchain Innovation in Singapore in collaboration with the Singapore Economic Development Board and the Monetary Authority of Singapore.