A source has revealed that Japan is spearheading the development of a cryptocurrency network that will compete with the industry-standard SWIFT---and Ripple by extension.
Japan Launching Cryptocurrency Network
According to a report published by Reuters on July 18, an anonymous source has claimed that Japan is in the process of building a cryptocurrency-based network for payments. While the project has yet to be announced and details remain scarce, the network is supposed to go live in the next several years.
Japan’s government seeks to lead the push for global cryptocurrency usage and the creation of an international network based upon digital payments. While SWIFT is the currency industry-standard for global banking transactions, the service has come under fire for its high costs and inefficiency in comparison to crypto.
If Japan succeeds in establishing a global crypto network, it will make existing remittance and cross-border platforms such as SWIFT obsolete. In addition, the country’s digital currency network could compete with other transaction-focused services, such as Ripple’s payment platform and the XRP cryptocurrency.
The source claimed that the project was being developed to combat money laundering globally, and to provide banks with a more secure and efficient means for transactions. Japan is also planning to work with other countries on the project, and to impose regulatory oversight.
According to the Reuters report,
“A team related to the inter-governmental Financial Action Task Force (FATF) will monitor its development and Japan will cooperate with other countries, the source said.”
The report continues,
“FATF in June approved the plan for establishing the new network, which was proposed by Japan’s Ministry of Finance and the Financial Services Agency (FSA) regulator, according to the person.”
The source did not give details on how the network would operate, but its primary focus will be on providing international payments between banks. Neither the FSA or the Japanese Ministry of Finance would comment on the new development.
Japan has been scrutinizing cryptocurrency exchanges in recent years and proactive in initiating regulation, in part due to the massive attention created over being host to Mt. Gox’s collapse. In addition, the country has launched a working group to evaluate regulatory approaches on Facebook’s libra.