Several Japanese banks intend to form a consortium with SBI Ripple Asia and jointly build a blockchain-based system for 24-hour fund transfers services, internet giant Ripple said last week.
The alliance is seen to initially attract some 15 members, both small and large banks, as well as online banks. Bank of Yokohama and SBI Sumishin Net Bank are two of the brands that are to take part in the initiative.
They will employ a blockchain-based payment settlement system developed by US fintech Ripple Labs, which has partnered with SBI Holdings, co-owner of SBI Sumishin Net Bank.
The system will be adapted to the Japanese market and will be used for domestic, as well as international transfers. It will ensure faster, low-cost, high-secure round-the clock wiring services. Wiring costs are expected to fall to a tenth of a twentieth of the regular. Participating banks will use the system to share transaction histories and other data.
A study group on making the system commercially feasible will be formed in October and the service is scheduled to be launched as early as spring 2017.
Blockchain technology is used by cryptocurrencies for record-keeping of database. It serves as a public ledger for all BitCoin transactions. BitCoin represents a cryptocurrency and an open-source network for peer-to-peer transactions, using no banks or central authority. The network is accessible world-wide and supports international payments. The problem with BitCoin is that users can make transactions without revealing their identity.