Fujitsu has been tapped to develop the application.
Japanese banks have moved into field trial stage with the initiative exploring the use applications of blockchain technology to settle payments, according to a press release.
The nine participating banks include 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. IT giant Fujitsu serves as application development vendor.
The trial, which will be conducted by the Japanese Banks' Payment Clearing Network, otherwise known as Zengin - net, will make use of a digital currency to evaluate the functionality of the system for small-scale transactions using real time gross settlement. The test will also serve to confirm the viability of blockchain technology for this purpose.
The trial is made up of three steps: Zengin-net will first issue a digital currency to the requesting bank on the Inter-bank settlement platform. Settlement will then be conducted by transferring digital currency from the originator bank to the receiving lender. Zengin-net will then proceed to collect the digital currency on the platform.
The move towards tech-enabled payment is in line with the government's target of doubling cashless settlements to 40% of transactions over 10 years as part of its “Society 5.0” future investment strategy.
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