Japanese banks embrace blockchain after successful trial
Nearly a third of Japanese banks will begin implementing a blockchain payment platform, after the completion of a pilot run earlier this month.
SBI Ripple Asia, a joint venture between Ripple and Japanese financial services giant SBI Holdings, launched the pilot program in October 2016 with a consortium of 42 member institutions, including both brick-and-mortar and online banks. After a trial run, some 47 banks are now set to bring Ripple’s cloud-based payments platform to the masses.
Emi Yoshikawa, Director of Joint Venture Partnerships for Ripple, anticipates that their network will grow further still, telling MSNBC that she expects another 10 to 20 financial institutions to join the platform in the next year, as it enters the commercial implementation phase.
The cloud-based payment transfer platform adopted by these banks — called RC Cloud — facilitates real-time, peer-to-peer fund transfers both within Japan and internationally. Accenture estimates that global application of distributed ledger technology will cut costs in the financial services sector by $20 billion per year by 2021, potentially creating a huge shift in the business model for existing financial institutions.
“Domestic and cross-border payments have been silo processes that are expensive,” SBI Ripple Asia CEO Takashi Okita said. “But RC Cloud allows for a seamless transaction for both types of payments on one platform.”
As demand grows for similar technology worldwide, other players in Japan’s financial sector are also looking to stay ahead of the technological curve using blockchain solutions. In December, the Bank of Japan announced that it had been experimenting with its own “test-drive” of distributed ledger technology, and Bank of Tokyo-Mitsubishi UFJ is looking to issue its own bitcoin-like virtual currency by fall of this year.