TOKYO: Japanese multinational IT provider Fujitsu is, together with Japan’s three biggest banks - Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group (MUFG) – to field trial person-to-person money transfer systems using blockchain technology.
This is according to Tech in Asia, which reported that the company will begin testing next January. Lasting three months, the trial forms part of Fujitsu’s development of a service with a mobile app interface to transfer money between customers of different banks securely using blockchain.
The test will verify whether the consortium can link an individual money transfer account, described by Fujitsu as “a pseudo-account created on the money transfer service platform for individuals for each service user,” to the user’s bank account.
In a statement, Fujitsu added that it will “confirm whether the new platform can accurately and securely handle a series of processes, including transferring value between money transfer accounts for individuals, as well as clearing and settlement.”
In its plan of evaluation, the company notes that it will be observing the “practical functionality and operability” of the system, with the end-goal of achieving a more convenient service for consumers.
This is key. While blockchain technologies have been heralded as imminent for a number of years, because of the mathematical complication of each process – the creation of each ‘block’ – widespread adoption has proved a significant computational hurdle.
As WARC noted in a recent summary of the technology, “such is the computing power required to log each transaction, that only a handful can currently be processed per second.”
Japan has been making moves in this area for some time, now raising its head above the parapet to attempt to become a world-leader in blockchain technologies. Best-known for the Bitcoin currency which sits on a distributed – blockchain – ledger, it was this invention that ignited imaginations and set in motion heavy investment from traditional financial institutions, which sensed the changing winds.
According to Tech in Asia, Japanese yen already accounts for around a third of bitcoin trading volume by July this year – though that figure is difficult to verify. While other countries, notably China, have cracked down on cryptocurrency exchanges, Japan sought in September to regulate them.
Yuzo Kazo, CEO of bitFlyer one exchange, said the Japanese regulator’s decision showed its “openness and forward thinking,” and added that the “regulation could not come at a better time for the blockchain space.”
Sourced from Tech in Asia, Fujitsu, CNBC, WARC; additional content by WARC staff