Japan’s Banks Elect Fujitsu to Build Their Blockchain for Interbank Settlements

Japan’s Banks Elect Fujitsu to Build Their Blockchain for Interbank Settlements

by October 30, 2018

Last year, a consortium of 61 Japanese banks banded together to test domestic fund transfers using digital currencies in hopes of gaining a low-cost alternative to traditional money transfers. At the time, the consortium tossed around the idea of using Ripple to achieve their goals.

One year later, and it is announced that Fujitsu has been selected as an application development vendor development vendor for a field trial exploring the potential use of the Japanese Bankers Association’s (JBA) Collaborative Blockchain Platform as a funds transfer settlement system based on blockchain technology. The trial will be conducted by the Japanese Banks’ Payment Clearing Network, otherwise known as Zengin.

Perhaps following the fall and instability of Ether-backed tokens, the consortium has now decided to go for what seems to be an in-house “digital currency” for their purposes—in the hopes of increasing the functionality of the platform as a blockchain-based transer system for small-scale transactions, and as a trial to confirm the viability of blockchain in this specific context.

The currency will be tied to Japan’s yen, with 1 unit equals to 1 yen. Similarly to Ripple, interbank transfer costs can be kept low as any interbank settlements will be handled through this digital currency and other funds clearance will not be necessary.

The transactions will be made using real-time gross settlement (RTGS, 4) method.

fujitsu blockchain trial consortium japan zhengin

Image Credit: Fujitsu

Fujitsu’s role in all of this is to build the trial’s interbank settling platform, the JBA’s Collaborative Blockchain Platform, leveraging a P2P money transfer platform it made in 2017 with 3 banks.

The trial will begin with 9 banks: Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Resona Bank, The Joyo Bank, The Bank of Fukuoka, The Nishi-Nippon City Bank, Sumitomo Mitsui Trust Bank, and the Keiyo Bank.

Featured Image of Fujitsu, Sydney by FDC Building