Three of the biggest banking corporations in Japan have partnered bitFlyer, Japan’s biggest bitcoin exchange to test the viability of domestic money transfers over blockchain technology.
The banks discovered that money transfers over a blockchain were just as fast, if not faster compared to traditional money systems.
In a report today by regional publication Nikkei, few details have been revealed, about the banks-led blockchain tests including the crucial snipper of whether or not the distributed ledger used was, in fact, the bitcoin blockchain. It’s merely speculative, due to the involvement of bitFlyer, a Tokyo-based bitcoin exchange operator that recently saw monthly yen-bitcoin transacting volumes exceed 100 billion yen (approx. 1 billion USD) in July 2016.
Still, the report confirms that the proof-of-concept experiment lasted a whole nine months through September 2016, as a part of a concentrated effort between the unnamed banks to explore and develop blockchain solutions for interbank payments. The three banking giants sought the services of the Deloitte Tohmatsu accounting group to form a research forum before roping in the services of bitFlyer for the blockchain experiment.
Blockchain Beats Banks’ Traditional Tech
Further, fears of any transactional bottlenecks with blockchain technology were put to rest as researchers clocked 1,500 transactions per second via the blockchain (still unknown if it was the bitcoin blockchain or a privately developed, permissioned ledger) used during the tests. That number already beats the 1,400 transactions that the current interbank wire system is capable of, at peak speeds.
The banks are expected to publish the results of their comprehensive, near-year-long blockchain test soon, the publication revealed.
One of the three participating megabanks is likely to be the Bank of Tokyo-Mitsubishi (MUFG), Japan’s largest bank by assets. The banking institution has notably revealed trials for its own digital currency in June 2016, MUFG coin, after hinting at it earlier this year. A prolific investor in bitcoin and blockchain endeavors – MUFG has invested and partnered US-based exchange Coinbase – the bank has also roped in technology giant IBM to develop and implement a smart-contracts-based-blockchain born out of the Hyperledger Project for multi-party business transactions.
Ultimately, the bank could become the first in the world to issue its own digital currency sometime in 2017 and the fervent activity surrounding digital currencies and blockchain technology comes in a year after the Japan passed a bill to officially recognize digital currencies as ‘real money’ while the acknowledgement followed suit with a later bill to regulate digital currency exchanges in the country.
The story will be updated when CCN learns more of the blockchain used during the banks’ experiment.
Images from Shutterstock.