Japan's payments and remittance industry primed for a real-time & instant blockchain-based upgrade?
A blockchain-centric consortium of banking and financial services institutions in Japan now sees 42 members among its ranks in a concentrated effort to leverage bitcoin’s underlying innovation for payment and settlement solutions.
The consortium, planned in collaboration between Japanese financial services firm SBI Holdings and its subsidiary SBI Ripple Asia, was discussed as early as August 2016. The working group was to be created to focus on blockchain-based payment and settlement services.
More specifically, the group of banks sought to address the increasing new trend of real-time, round-the-clock settlement options – like bitcoin – which poses a threat to the payments sphere for banks. Another core objective saw the exploration of small-value remittance and cross-border remittance services that are coming to the fore in the mainstream.
Now officially titled “The Japan Bank Consortium to Central Provide Domestic and Cross-Border Payment”, the working group initially planned to have 15 member banks in October before doubling to about 30 come March 2017. However, positive response from several financial institutions in Japan sees the Consortium launch with 42 member banks that include non-international regional financial institutions as well as digital or internet-only banks.
An excerpt from the press release [PDF] adds:
The Consortium will promote discussion, from both technical and operational perspectives, on activities required in domestic and foreign exchange services to utilize blockchain and other new technologies.
Furthermore, the inclusion of regional banks will see the consortium drive toward a common platform that consolidates both domestic and foreign exchange services.
Perhaps most notably, the banking consortium’s efforts to build a 24-hour, real-time blockchain-based payments and settlement infrastructure aims to test and complete a proof-of-concept solution by March 2017, before commercial implementation.
The consortium makes for a significant coup for fintech startup Ripple’s expansion in Japan and Asia. In January 2016, San Francisco-based Ripple collaborated with SBI Holdings to launch SBI Ripple Asia, a remittance company that will serve Japan, China, Taiwan, Korea and other ASEAN countries.
SBI Ripple Asia will serve as the consortium’s secretariat and one presumes that Ripple’s expertise in developing a blockchain platform for remittance could be influential in the Japanese banking industry’s foray into shaping a blockchain-powered payments infrastructure.
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