The Three Megabanks in Japan Cancel Blockchain Money Transfer Service in Favor of Own Cryptos

Three leading Japanese banks have reportedly annulled their plans to create a Blockchain-powered, P2P money transfer project. Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho, who have earned the tagline, ‘megabanks’ saw it as a replica of their individual projects and thus chose to shelve it altogether.

In 2017, the three banks embarked on the creation of an ambitious Blockchain-based project. The three banks had envisioned a platform that would have the blockchain system and the app linked to every bank’s accounts. And so they chose to partner with Fujitsu a blockchain and cloud-based Japanese tech behemoth.

Fujitsu’s role was to handle the creation of the Blockchain part of it in addition to creating an intuitive smartphone app. And, so committed were they that they had even conducted the first tests in 2017, with the all-inclusive tests slated for 2018.

Mizuho and Mitsubishi UFJ Projects Forced the Cancellation

However, in an unexpected turn of events, Nikkei Asian Review reports that the banks instead chose to allow their customers to freely use each other’s platform to send and receive funds. The Japanese announcement stipulated that customers would only need to link their cell phone numbers or email addresses linked to their individual bank accounts via virtual accounts.

One of the factors that contributed to canceling the project is the issue around cryptocurrencies that would have formed the core of it. As at now, two of the banks (Mitsubishi UFJ Financial Group and Mizuho Financial Group) are at an advanced stage, each hoping to roll out a cryptocurrency.

Plans to launch Mizuho Financial Group’s J-Coin had started way ahead of the launch of their now-abandoned project. Once launched, the bank expects to use the token and slash money transfer expenses since it’s reported that its value vis-à-vis the Japanese Yen will be 1-to-1. In fact, the preliminary test of the currency took place on 8th December 2016, a project they partnered with IBM Japan and there are hopes that it will be available soon.

Mitsubishi UFJ Financial Group’s cryptocurrency, called MUFG Coin, however, will serve a role that’s more or less the same as that of Mizuho Financial Group’s J-Coin. It will be similar in everything, including the fact that it will merely act as a Japanese-Yen-pegged stablecoin. The group’s president, however, expects the cryptocurrency to additionally help eliminate issues that traditionally bedevil the crypto world.

They’ve Joined R3 Consortium

Away from shelving the idea and the two banks focusing on their respective cryptocurrencies, a lot has been happening behind the scenes. It’s reported that the two Japanese are part of the R3 Consortium, a platform consisting of over 200 firms.

The consortium was established in 2015 and its primary role was to serve as a universally distributed ledger tech firm. It is a project they have pursued up to now when they have Corda, a Blockchain-based open-source ledger platform. And as the two Japanese banks join the already growing list of companies, mostly drawn from the banking and commerce industries, they are hopeful to leverage the opportunities offered by the New York-based fintech company.

About Sumitomo Mitsui Financial Group, Inc

It’s safe to say that this Japanese banking and financial services company isn’t a stranger to the blockchain and the cryptocurrency industry. Being Japan’s 2nd largest bank by market share, Sumitomo Mitsui had expressed immense interest in the vibrant crypto industry in 2018 only for the project to fail.

In a 3-member consortium that had planned to pioneer blockchain-powered ways of streamlining and upgrading inter-bank fund transfer. The R3 Consortium-member hasn’t given up on its efforts to adopt blockchain in its operations. The bank’s president, Masayuki Hyodo, had said the company would look into the world of digital currency in the future.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group is the largest banking institution in Japan. The group is expected to roll out its proprietary coin, MUFG Coin and an accompanying mobile app, to the crypto-hungry Japanese in 2019. If successful, the bank ranked the 5th largest in the world will become the first to issue a blockchain-backed cryptocurrency. And just like the growing list of Japanese banks, it is a member of R3 Consortium.

About the Mizuho Financial Group

Mizuho Financial Group, Inc, or Mizuho as it’s called, will possibly have a cryptocurrency of its own in 2019. In what experts say it will slash the popularity of credit card usage by offering relatively lower expenses, Mizuho’s J-Coin will reportedly incorporate 60 regional banks.

The stablecoin will most definitely rival Mitsubishi UFJ’s MUFG Coin. The project has been on-going since 2017 and it’s partly the reason why Mizuho and some two other banks had to cancel their pioneering blockchain-powered ways of streamlining and upgrading inter-bank fund transfer.

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