Fujitsu Selected By Japanese Banks to Enable Blockchain Based Fund Transfer

The Japanese giant Fujitsu has announced on Monday that it will be collaborating with 9 Japanese banks to use the blockchain technology. It will be carrying out a trial to help the Japanese banks securely transfer funds with the help of Japanese Bankers Association's (JBA) Collaborative Blockchain Platform.

The announcement mentioned its trial objectives and noted that “The field trial will use a dedicated digital currency for interbank settlements to evaluate the functionality of the system as an economical new interbank funds transfer settlement system for small-scale transactions using a real-time gross settlement method. The participants will use the trial to confirm the viability of blockchain technology in this context.”

The Zengin, better known worldwide as the Japanese Bank's Clearing Network, has asked Fujitsu to help them with the trial process. Zengin helps Japanese banks with the online fund transfer process domestically.

As a part of the initiative, the blockchain based application development solution was awarded to Fujitsu which will be based on the Japanese Bankers Association's (JBA) Collaborative Blockchain Platform (ICT) which is used for settling fund transfer using a distributed ledger such as a blockchain technology.

There are a total of nine banks which will participate in the process, namely, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Resona Bank, The Joyo Bank, THE BANK OF FUKUOKA, THE NISHI-NIPPON CITY BANK, Sumitomo Mitsui Trust Bank, The Keiyo Bank

The Blockchain Trail Process in brief

The trial process will be evaluated in the following way,

Issuance: When a bank receives a request, Zengin-net will issue a digital currency to the bank on the Inter-Bank Settlement Platform.

Transfer: When there is a need of interbank fund transfer settlement, the settlement will be done by transferring the digital currency from the bank sending the funds to the bank receiving the same.

Collection: Zengin-net will collect the digital currency issued to the bank using the new platform.

The system will be leveraging the P2P money transfer platform, which was developed last year in conjunction with three major banks to generate the money transfers to other banks that will trigger interbank funds transfer settlement.

Fujitsu will provide the trial environment on the JBA's Collaborative Blockchain Platform.

The giant already has a partnership with the JBA with the JBA helping its members to help learn how to efficiently use the emerging technologies and create a helpful service model. Fujitsu is not new to the blockchain industry.

In early 2018, the company released a blockchain based reward point system aimed at the retail sector. Working on various other implementations of the blockchain technology, they released software which enables faster transactions on the Hyperledger Fabric - a blockchain solution hosted by the Linux Foundation.

Blockchain Technology has come a long way in the two years, with an exclusive effort to use them in interconnecting banks and has helped transfer funds internationally cut a significant amount of time. It's just a matter of time before blockchain redefines the way we live.

What do you think about blockchain technology and its role in banking? Do let us know in comments below.