Blockchain can be used to clear and settle stocks, an experiment involving the Bank of Canada has shown.

Canada’s central bank, stock-exchange operator TMX Group Ltd. and the nation’s payments system used the distributed ledger technology, or DLT, to clear and settle securities on an integrated platform as part of their Project Jasper research initiative.

“DLT is a promising technology that has the potential to reduce costs for participants and open new opportunities," Scott Hendry, Bank of Canada’s senior special director of financial technology, said Monday in a statement. “Work remains to be done to determine how it can be set up to maximize the benefits for the whole financial system.”

The Canadian team joins others around the world in testing or developing DLT, which underpins cryptocurrencies such as bitcoin. Australia’s main stock exchanged, ASX Ltd. said last December it planned to move to blockchain to process equity transactions.

The project involved building and testing a system designed to be integrated with existing market infrastructure. Securities and cash were brought on the ledger through the issuance of digital depository receipts by the Canadian Depository for Securities and Bank of Canada, allowing participants to settle simulated securities against simulated central bank cash on the ledger.

The test showed it’s possible to deliver payments by directly swapping cash from buyers to sellers on a distributed ledger, with a system designed to preserve privacy for market participants. The findings were disclosed Monday in a 36-page report co-written with Accenture Plc and blockchain-software company R3.

"Project Jasper findings offer critical insight to understanding how we can adapt as an industry to a rapidly evolving global financial ecosystem," John Lee, TMX’s managing director of enterprise innovation and product development, said in the statement.