Dublin-based international investment community representative the Irish Funds Industry Association is working with financial consulting firm Deloitte LLP to develop a blockchain system for regulatory reporting of investment returns to the Central Bank of Ireland.

According to the announcement from Irish Funds, the project focuses on the Resident Investment Fund Returns (Money Market and Investment Funds Returns Reporting or MMIF) regulation, which covers domestic investments. The regulation requires investment funds activity submissions quarterly and allows for reporting to be done online.

“Regulatory reporting is a key obligation for our members and an area of priority focus for the Central Bank of Ireland in 2017,” said Irish Funds Chief Executive Officer Pat Lardner.

The Irish Funds project is a proof of concept that will use a blockchain, a trusted distributed ledger technology, to provide enhanced compliance and greater transparency. The company also seeks to understand the potential cost benefit of using the technology.

Within the financial technology industry, blockchains have been used to store sensitive information in a manner that can be cryptographically validated. A blockchain can also be used to allow both the reporting entity and the regulator to access the same reported data while securing records from prying eyes.

The project is being developed by Deloitte’s recently launched Europe, Middle East and Africa Grid Blockchain Lab in Dublin.

The Blockchain Lab, part of Deloitte’s blockchain initiative, dubbed “The Grid,” is home to a team of 50 blockchain experts and designers and tasked with “ready to integrate” solutions for financial services clients. The proof of concept designed to secure MMIF reporting will become the first of many solutions developed by the lab.

Several participants have joined Irish Funds and Deloitte in this project, including the Northern Trust Corp. and State Street Corp.

According to a report from PricewaterhouseCoopers, over $1.4 billion in investments went into blockchain startups over a period of nine months during 2016.

Also, in this growing industry, the Central Bank of Ireland is not the only central bank to reach out to startups or start its own initiatives into blockchain technology. Recently, France’s central bank opened up a new innovation lab, seeking collaboration with blockchain startups, and the Reserve Bank of India began a blockchain trial with regulators and banks.

Image: The Custom House At Sunset, Dublin, Ireland by Giuseppe Milo via Attribution Engine. Licensed under CC BY