Category Archives: Japan Blockchain News

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Hana Financial Partners with Sumitomo Mitsui for Blockchain Partnership

Hana Financial Group and Japan’s Sumitomo Mitsui Trust Group have recently renewed their partnership and announced a joint blockchain based project to develop new digital business. The project is aimed to expand the ties in asset and trust management, according to the Seoul-based holding company, and was announced last Friday at the time of the fifth anniversary of their partnership at the Hana Global Campus in Incheon’s Cheongna International City.

The executives of both organizations revealed the collaboration plans for the development of the infrastructure, global aviation financing, and human resource exchange. Hana group’s subsidiary, KEB Hana Bank, forged a strategic alliance with the Dutch company Arena Aviation Capital to facilitate commercial aircraft leasing and financing using blockchain, where the companies are now looking to launch these services in Japan.

In addition, Sumitomo Mitsui Trust will collaborate with Hana Financial to launch the Global Loyalty Network (GLN) digital platform in Japan by the end of this year, which will allow customers to perform digital transactions from anywhere around the globe by leveraging the decentralized blockchain system.

The system forms a global alliance of GLN across industries and allows access to robust local networks and infrastructure through blockchain based GLN. The users share benefits such as instant access to locally offered deals and discount offers worldwide while the system also enables the payment, transfer, exchange, redemption, and earnings of digital assets across borders.

Along with KEB Hana Bank, Hana Financial Investment has also pitched in the Hana-Sumitomo Mitsui alliance, with the Hana Financial Chairman Kim Jung-tai stating, “We will further use each other’s strength to expand our global reach.”

The partnership between the two financial groups began in December 2014 after their first agreement in investment banking. In February 2018, the conglomerates further strengthened the ties by creating a partnership to collaborate in financial technology and real estate investment management.

 

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Japan Central Bank Examines Digital Currencies Again

Japan Central Bank Examines Digital Currencies Again

The role of central bank digital currencies (CBDCs) in the present monetary system is being re-examined by the Bank of Japan (BoJ). The central bank summarized the findings in a comprehensive report published after previous negative opinion of CBDCs by the bank last year.

In the said report, BoJ mentioned various approaches to implement a CBDC. Moreover, probable outcomes of each approach have been discussed in detail. The bank has divided possible CBDCs into two categories. One will be accessible to the general public like banknotes, while the other will be limited to large-value settlements only.

The said categorization has been done in accordance with the report that was published in March 2018 by the Bank for International Settlements, which divided CBDCs into wholesale and general purpose ones.

The report’s authors noted that wholesale CBDCs are not expected to bring any new feature to the existing monetary system. Therefore, the focus must be shifted to the general purpose currencies. The major portion of the report deals with general purpose CBDCs. For token-based ones, blockchain and distributed ledger technology can be utilized, stated the report.

Masayoshi Amamiya, deputy governor of BoJ, holds a negative opinion regarding central bank-issued cryptocurrencies. The South Korean central bank also stated that it will not issue any central bank digital currency.

 

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Japan to Upgrade Crypto and Exchange Legislation

In a recent report, local Japanese media outlet Sankei has indicated that the Japanese Financial Services Agency (FSA) is to change the legal foundations on which cryptocurrency regulations are based in the country.

Classification switch

The report made on3  July states that the Japanese financial watchdog is considering to regulate cryptocurrency exchanges under the Financial Instruments and Exchange Act (FIEA), which is a switch from the Payment Services Act.

Under the new classification, exchanges would be required to manage private and institutional assets separately.

According to the report made by Sankei, the law (FIEA) “obliges securities companies and others to manage customer funds and securities (stocks, etc.) separately from corporate assets”. It also establishes “a strict investor protection system, such as forbidding insider trading of stocks”.

Customer protection

The cause for the move came after a scandal involving NEM coin in January 2018; at this time an equivalent to roughly JPY 58 billion (USD 530 million) was hacked from one of the largest cryptocurrency exchanges in Japan, Coincheck.

This led to the Japanese government and the FSA recognizing that customer asset protections were of utmost importance and, furthermore, the previous legislation that was enacted in April 2017 was insufficient.

The April 2017 legislation was huge news from Japan; it saw Bitcoin and other virtual currencies being officially accepted as legitimate means of payment. It also meant that cryptocurrency exchange operators with a domestic presence were mandated to register with the FSA and gain a license should they wish to resume business.

Now, just over a year later and after a difficult lesson, the inefficiencies of the previous legislation have been acknowledged and now a more robust set of investor protections are required.

Currently, cryptocurrencies are legally considered the same as electronic money; however, should the FSA move the regulatory basis to FEIA, cryptocurrencies will be treated as a financial product. This creates the possibility of trading cryptocurrency derivatives like futures and exchange-traded funds.

Moving forward

Bitcoin News has reported on multiple occasions that Japan is somewhat a speculative hotspot for the future of cryptocurrencies. This year has seen the pro-crypto nation wrestle with crypto-scepticism several times.

In June, Japan’s self-regulatory Virtual Currency Exchange Association (JVCEA), was to announce fresh laws regarding insider trading by banning private coins. However, cryptocurrency exchanges weren’t particularly pleased even going as far as to say that the rules were “as tough as the Financial Instruments and Exchange Act”.

Though in hindsight, this quote appears to overlook the NEM scandal. Furthermore, JVCEA has been offering suggestions to the FSA regarding mandatory storage protocols for crypto exchanges.

 

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Japan’s Largest Bank Partners with US Tech Giant for Blockchain Payment Service

The biggest bank in Japan has partnered with a US tech company to design a blockchain capable of handling 1 million transactions per second, boosting speed and reducing transaction feeds through distributed ledger technology.

MUFG and Akamai partnership

The Mitsubishi UFJ Financial Group (MUFG) partnered with US-based Akamai to deliver a new global payment network service, which is intended to be available from 2019 and will be compatible with Internet of Things (IoT) style payments and other emerging technologies.

“MUFG and Akamai, using Akamai’s globally deployed high-speed and high-security platform, will utilize this new blockchain’s high-speed processing and secure value transfer abilities to promote pay-per-use, micropayments, and other new IoT generation payment methods, and to support the diverse payment options of the sharing economy by offering an open platform,” reads the 21 May press release.

The new blockchain developed contrasts with the original cryptocurrency Bitcoin, which was built on the first blockchain in the world and can only process seven transactions per second; the distributed ledger developed by MUFG and Akamai is “permissioned”, which means that verified computers are the only ones able to join the network.

Risk and reward

MUFG and Akamai detailed the growing interest in blockchain technologies and highlighted its capacity to “strengthen protection against falsification of transactions and drastically lower costs”, as well as the fact that financial institutions across the globe are partnering with tech companies to also test proof of concept designs.

While the technology is reported to “create new risks for banks”, the Japanese financial giant has embraced it with Akamai, which according to the press release is “the world’s largest and most trusted cloud delivery platform”.

Blockchain has been receiving surging amounts of interest from governments and institutions since ICOs and cryptocurrency markets exploded in 2017. Industry heavyweights such as IBM, Amazon, Microsoft, and JPMorgan are making bold steps toward adopting the disruptive technology, which will only contribute to the future successes of the blockchain industry.

Blockchain, banking, and a cryptocurrency

Earlier in May, the Japanese financial giant reported that it had intentions of trialing its own cryptocurrency in 2019, which lines up perfectly with the intended release date for the new blockchain service.

As reported by Japanese local news outlet NHK, the fifth largest bank in the world by assets will be rolling out a trial app to approximately 100,000 MUFG account holders who can install the app on their smartphones and convert their deposits into the MUFG coin; one MUFG coin will be worth one Japanese yen. Users will also be able to use the currency wherever they so please and transfer the currency to accounts of other participants.

It is a clear indication that the global stance on blockchain and cryptocurrency technologies is shifting toward the mainstream. Should the partnership and digital currency trial be successful, it will prove a transformative moment for the industry, financial institutions and society.

 

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