The blockchain revolution continues to rotate its slow-spinning wheels. On Monday, nine different Japanese banks announced that they would test the technology to see if they can use it for interbank settlement.
The field trial will see the Japanese Payments Clearing Network (Zengin-net) use a dedicated digital currency and a blockchain-based platform for interbank settlement.
A statement released on Monday by Fujitsu, a technology company, indicates that it will be building the new interbank settlement platform.
In doing this, it will be using a peer-to-peer (P2P) money transfer platform that it developed in 2017. That system was developed in conjunction with three major Japanese banks – Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group.
Will it work?
The trial period will seek to determine whether or not a digital currency can be used as a means of meeting interbank settlement requirements.
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It will also look at whether or not blockchain is itself a viable means by which to conduct settlement transactions. Specifically, the companies will be looking at the security and performance of the system to see if it meets current standards.
According to Fujitsu, the digital currency will be issued by Zengin-net. It appears that the digital currency doesn’t have a name as of yet. However, it does have a value. Each coin will be equivalent to one yen.
Fujitsu’s statement indicates that banks will exchange fiat currency for the new digital currency with Zengin-net.
The process for settlement will involve Zengin-net issuing digital currency to banks. Banks will then pay, via Fujitsu’s P2P payments system, banks who they owe money to.
Banks receiving that digital currency can then exchange it for fiat currency with Zengin-net.