American worldwide financial services holding company State Street Corp has completed testing a blockchain system that will be used to streamline the securities lending process, since the financial sector hastens its efforts to adopt the distributed ledger technology, as reported by Reuters.

“The aim is to enhance the operational aspect of securities lending. In a lot of cases there is no automated linkage to say which account it (the collateral) should go back to,” Hu Liang, senior managing director of the Emerging Technologies Center at State Street, told Reuters.

The software has been tested over the course of seven months and will be chosen as one of State Street’s blockchain projects to be implemented in 2017, Liang added. This blockchain system would transform the collaterals that are posted by an investor in order to borrow securities from the company’s clients into a digital token. It would create a digital and immutable record of usage of collateral. It would also make easier and quicker for State Street to return the collateral to the borrower’s account once their lending position had been unwound.

State Street and other financial institutions have been working on several blockchain experiments over the past year. The blockchain system by the financial services firm comes as financial firms are testing and experimenting on blockchain.