Fujitsu, a leading IT firm in Japan, has indicated that it will be building a blockchain-powered inter-bank settlement system.
In a press release, the IT firm, said that it “has been selected as an application development vendor for a field trial exploring the potential use of the Japanese Bankers Association’s (JBA) Collaborative Blockchain Platform.”
The project will have nine participating 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. This network of banks is also referred to as the Zengin-net
According to Fujitsu, the banks are seeking to establish whether a digital currency can be adopted as “a new system for inter-bank settlement using blockchain technology.”
The project will further gauge the “performance and security” of such a system if it were to be fully adopted.
The trial will concentrate on the issuance, transfer, and collection of the digital currency flowing through the inter-bank settlement system. According to the trial details, the Zengin-net will issue digital currency to the requesting bank.
This will be followed by the transfer of the digital currency “from the originator bank to the receiving bank.” The final stage, collection, will involve the Zengin-net collecting the digital currency issued to the bank on the new blockchain-powered inter-bank settlement system.
Fujitsu will also make use of a system they developed last year and which was meant to enhance peer-to-peer money transfer. The digital currency will have a 1:1 ratio to the Japanese Yen.
In September 2017, Fujitsu had a partnership with the Japanese Bankers Association (JBA). By then, JBA was evaluating the viability of using the distributed ledger technology to run financial services.
The JBA has major and smaller banking institutions under its wing and guides these institutions on how to tap into emerging technologies to enhance services.
If the trial becomes successful, do you think it will be the initial steps towards banks appreciating digital currencies?
Let us know your thoughts in the comments section below.