TOKYO -- The Japanese Bankers Association will work to provide a common basis for members to experiment with the technology that underpins virtual currencies like bitcoin, possibly leading to cheaper, more convenient financial services.
The effort announced Thursday by the association seizes on the potential of blockchains -- distributed ledgers, or databases, that allow transactions to be recorded and monitored through peer-to-peer networks.
Blockchain technology could eventually replace centralized management of transaction data on massive banks of servers, lowering systems development and management costs. The cost of transferring money in Japan, for instance, could drop to one-tenth the current level by some estimates.
The first trials of blockchain-based systems by member institutions are expected to start this fall. The bankers association will contract with tech companies for the trials.
The association maintains its own server network, known as Zengin System, for fund transfers among members. The industry body's willingness to accommodate innovations in distributed ledgers suggests a realization that it could end up being bypassed.