Japanese Banks Trial Virtual Currency For Funds Transfers

Members of a Japanese bank consortium focused on blockchain are set to test a virtual currency-based funds transfer system.

Institutions including Bank of Yokohama, Mizuho Financial Group and Resona Bank are taking part in the new trial, according to a report from Nikkei.

The test is the latest from the unnamed consortium, which is led by financial services firm SBI Holdings and a joint venture between that firm and distributed ledger startup Ripple, first launched in January 2016.

More than 50 institutions are part of the initiative, which has tested other applications of Ripple’s tech in the past.

According to Nikkei, the banks want to assess the ability to send domestic fund transfers outside of normal operating hours, as well as to see how a virtual currency used between banks could cut costs. Further, the banks are said to be weighing the creation of a wholly new virtual currency or digital token for this purpose.

Additionally, the test could expand beyond domestic transfers, the outlet reported.

“The consortium is also considering testing virtual currency-based international fund transfers. The hope is that the use of blockchain technology may be able to lower costs compared with SWIFT, the global payments network,” Nikkei said.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple. 

Image via Shutterstock 

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