Japan’s Biggest Bank Partners up with Akamai for Blockchain-Based Payment System

The last couple of months have brought along an increase in Japan’s interests towards blockchain technology. In fact, recent reports indicate that the country’s biggest bank is involved in co-developing a blockchain-based system, meant to speed up transactions, while lowering associated costs.

Based on this, the Japanese Mitsubishi UFJ Financial Group, commonly known as MUFG, has partnered up with U.S.-based Akamai, to develop a blockchain network capable of handling 1 million transactions per second, with a latency as low as 2 seconds. In other words, it only takes 2 seconds for the system to confirm a batch of transactions onto the distributed ledger. In the long run, it is expected that the system will be able to cover a whooping 10 million transactions per second, more than enough to power Japan’s entire financial system.

It is important to keep in mind that the system will feature a permissioned blockchain, rather than a permisionless one. This means that only registered users will be able to join the network, verify and confirm payments. The platform will operate with help via Akamai’s Intelligent Cloud Platform. The payment network will feature a communications network as well, yet its exact use is still unknown.

In a recent press statement, Nobuyuki Hirano, the CEO of MUFG, mentioned that: “For years, the financial industry has sought to utilize blockchain to secure and hasten transaction processing, and lower associated costs (…) the tech will support significantly greater volumes of high-speed payment transactions without compromising the level of security required to combat fraudulent transactions.”

At this moment in time, it seems like the system will be used for facilitating traditional online payments, yet in the future, it will have great utility in serving micro-transactions as well.

The MUFG platform is still under development, however. It is expected that it will be available to the public in 2020. The original press release notes that the system will be compatible with Internet-of-Things (IoT) devices, and other technologies.

Based on everything that has been outlined so far, the blockchain-based payment system may create precedent, and encourage adoption by other financial institutions in the country.