Fujitsu will operate an experimental blockchain network for the Japanese Bankers Association's (JBA), comprising nine large Japanese banks, the company revealed yesterday (Oct 29th) in a press release.
The goal of the testing is to “evaluate the functionality of the system as an economical new interbank funds transfer settlement system for small-scale transactions using a real time gross settlement,” according to the release.
Fujitsu will deploy their (to use a familiar term) testnet over Zengin-net, the Japanese Banks’ Payment Clearing Network, which serves the JBA. In effect, the test will utilize an in-house stablecoin, paired one-to-one with the Japanese yen. The company will also build on work it began last year, when it conducted a smaller P2P “blockchain field trial” with three banks.
Roughly sketching the testnet’s functioning from the press release, the deployment will center around Zengin-net: Zengin will issue a currency in the form of a digital asset when requested, it will be sent between banks, and the recipient bank will then return the digital asset to Zengin.
There is therefore no indication that the system will be decentralized. This observation perhaps echoes statements made recently by the Bank of Canada during its own forays into utilizing blockchain tech for interbank settlement; in the words of Senior Deputy Governor of the Bank of Canada (BoC) Carolyn Wilkins, that “there's always going to be a part that needs to be centralized.”
Unlike the Bank of Canada, there is no indication that Fujitsu will use a publically available platform to build upon for a testnet, such as Ethereum in the BoC’s case.
The interest in enterprise-grade blockchains and distributed ledger platforms is becoming widespread amongst global institutions. In addition to the BoC, banks in Spain, Singapore and Australia are just a few recent examples that are trying to apply the technology to interbank settlement.
Fujitsu is a Global 500 company, and grossed $39 billion in revenues in 2017. It is the tenth largest IT service provider in the world.