TOKYO -- SBI Ripple Asia looks to begin testing a funds-transfer system using blockchain technology between Japanese and South Korean banks by the end of fiscal 2017, applying experience gained from experiments in Japan.
The SBI Holdings unit will work with DAYLI Intelligence, a provider of blockchain technology, on the South Korean side. The payments experiment using virtual currency will run on blockchain, which involves having participants confirm a transaction by comparing their own copies of the register logging all transactions within a system. This decentralized record-keeping scheme allows money to be sent at any time and entails far lower costs than a conventional clearing arrangement.
SBI Ripple Asia leads a consortium of Japanese banks that are experimenting with blockchain-based transfers, including those using the virtual currency XRP, often referred to as Ripple. That group counts more than 60 participants, including Japan's three megabanks -- Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group -- as well as regional banks across the country.
South Korea's financial institutions also are taking a greater interest in blockchain as an interbank funds settlement method. Cross-border partnerships such as that with SBI Ripple Asia aim to popularize blockchain-based payments in that country by blending Japanese expertise with new technologies.
SBI Ripple Asia and its parent will begin a program in October to train engineers in the intricacies of blockchain and virtual currencies, aiming to promote research and experimentation in those areas. Around 20 companies, including Nomura Research Institute, Toppan Printing and NEC, are first on the list to take part in the program.