Technology giant IBM has signed a contract with the Bank of Tokyo-Mitsubishi, Japan’s largest bank, to develop and implement a blockchain based on smart contracts among business entities.
The Hyperledger Project, an open-source blockchain platform led by the Linux Foundation will see its deployment in a new partnership between IBM and the Bank of Tokyo-Mitsubishi UFJ (BMTU).
The two companies will build on a prototype that sees smart contracts on a blockchain used in multi-party business transactions to improve accountability and efficiency of service level agreements.
An initial pilot project will be built on the Hyperledger Project before deployment on the IBM Cloud for real-life contract management. The bank aims to begin using the blockchain platform within its businesses in 2017. Additionally, the two companies aim to manage agreements between themselves with the platform by the end of 2017.
Sensors will be used to embed information into the blockchain, enabling the companies to monitor delivery and usage of equipment. This will lead to automated invoicing and payment processes between IBM and BTMU.
In statements, BTMU deputy CEO for Asia and Oceania and general manager of Singapore branch and corporate banking division for Asia and Oceania, Motio Mitsuishi said:
Blockchain technology has the potential to change not only the financial world, but also other areas of the business world, leading to improved efficiency of the end-to-end business process.
The partnership will presumably see the two companies link at IBM’s Centre for Blockchain Innovation, a recently unveiled facility by the IT giant in Singapore.
Bridget van Kralingen, Senior VP of IBM Industry Platforms added that IBM will continue to invest “billions of dollars” into researching emerging and transformational technologies like blockchain.
Blockchain will reinvent complex multi-party and contract-based business models, especially in banking and financial services.
IBM is among the most prominent members of the Hyperledger Project and notably donated its code to the open-source endeavor at its very genesis. The technology powerhouse has also been markedly vocal in throwing its support for blockchain development. Furthermore, IBM’s contract with BMTU is only the latest in a string of partnerships it has established with Asian financial firms in blockchain-based endeavors.
Earlier in 2016, IBM struck a partnership with the Japan Exchange Group – Asia’s biggest stock exchange – to develop blockchain applications. IBM is also partnering with another Japanese banking giant, the Mizuho Financial Group, to test blockchain technology in settlements with virtual currencies.
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