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Mizuho, IBM Partner to Test Digital Currency Settlements

Last Updated March 4, 2021 4:49 PM
Samburaj Das
Last Updated March 4, 2021 4:49 PM

Japanese banking giant Mizuho Financial Group and technology firm IBM have announced a partnership to test blockchain technology used in settlements with virtual currencies, using code from the Linux Foundation-led Hyperledger project.

Mizuho Financial Group, a prominent Japanese banking group that is notable for its blockchain-based endeavors with previous efforts such as a partnership with consulting firm Cognizant to build blockchain solutions for record keeping has revealed a new blockchain project with tech giant IBM.

In a recent announcement , the Japanese financial group revealed a blockchain test with IBM, using the technology for instantaneous swaps of virtual currencies.

“By incorporating blockchain technology into settlements with virtual currency, Mizuho will explore how payments can be instantaneously swapped,” stated Masahiko Katou, senior technical officer at the group. He added that the pilot project could lead to results that could potentially lead “to new financial services” based on blockchain technology.

The financial group has a history of using IBM-led technologies such as business platform Watson  in the past and this time, IBM will be supplying the source code it contributed to the open-source Hyperledger Project.

Earlier in March 2016, Mizuho revealed a blockchain-based trial spanning three months that saw the bank partner with technology firm Fujitsu, successfully resulting in same-day settlements and tamper-proof results.

While details of the aforementioned ‘virtual currency’ settlements are scarce, it is likely that the currency will be a bank-issued token, rather than a prominent cryptocurrency such as Bitcoin or Ether. Furthermore, the process of settlement is almost certainly using a permissioned and private ledger.

Mizuho’s blockchain tests with a virtual currency comes at a time when Japan’s largest bank confirmed its own experiments with its blockchain-based virtual currency, MUFJ Coin. The conversion rate of one MUFG coin would be equal to one Japanese yen and it’s likely that a digital currency issued by Mizuho Financial Group will bear the same value.

Featured image from Shutterstock.