Japan to Replace its Domestic Payments System with Blockchain
Despite the transformation happening within the Japanese digital payments space, the country still depends largely on cash-based transactions. Over the last five years, cash-based transactions were estimated to be over 80% of the transactions in the country. Japanese domestic payments system, Zengin, is a quite complex system for peer-to-peer transactions. The payment system is offered by all the domestic banks in Japan, which charges over $2 per transaction. Also, the payment system would operate only till 3 PM and it would take more than a days’ time for the payment to reflect in the beneficiary account.
Japanese central bank has adopted blockchain for peer-to-peer payments, interbank payments and cross-border payments to facilitate real-time payment solutions only in the domestic payment ecosystem. Japanese central bank has approved MoneyTap mobile application, which works on a blockchain platform developed by Japan’s SBI Holdings Bank and U.S based Ripple Blockchain. Ripple’s blockchain has already been integrated with over 110 banks across the globe and it is providing cross-border P2P transactions in US, Western Europe, and a few Asian countries. Three leading banks in Japan namely, SBI Net Sumishin Bank, Suruga Bank, and Resona Bank are going to start offering MoneyTap to their customers.
Also, the money tap app is likely to be adopted by over 50 Japanese banks to facilitate a hassle-free and real-time P2P transfer services.
With the launch of MoneyTap, Japan is expected to become the first largest economy that has adopted blockchain for bank transfers. The technology is expected to be adopted by all major banks in Japan to replace cash-based transactions with digital payment services. Also, the mobile app will push cross-border e-commerce payments along with P2P transfers.