Japanese regulators and financial institutions are working on a blockchain ID platform that will seamlessly share consumer information between banks.
Japan’s Financial Services Agency – the country’s financial regulator and watchdog – is developing a blockchain-powered platform that will enable Japanese consumers to instantly share their personal information at multiple banks and financial institutions.
According to the Nikkei, the common identification platform will allow a bank account holder to register for a ‘shared ID’ which could then – as an example – be used to open another account at a different bank. The applicant would be required to provide the shared ID through a smartphone app authenticated through a fingerprint or a facial scan. Fundamentally, the shared ID would negate the need to enter, or re-enter personal information when applying for banking services at a new financial institution.
The personal information and data making up for these shared IDs will be entered, recorded and secured over a shared immutable blockchain developed by the FSA and other financial institutions.
Japan’s ‘Megabanks’ Share a Blockchain
The report also suggests that the FSA will establish an ‘administrative body’ to oversee the shared ID blockchain platform, an initiative that will be enabled by Japan’s ‘megabanks’, following a trial.
The FSA will begin an extensive testing process of the feature in October, with the trials expected to last a year. If successful, The Bank of Tokyo-Mitsubishi UFJ (MUFJ), Mizuho and the Smitomo Mitsui Banking Corp – Japan’s three megabanks – will be able to view details of each other’s customers, upon approval, over a blockchain.
With multiple blockchain endeavors of their own, all three of Japan’s megabanks are also investors in bitFlyer, the country’s biggest bitcoin exchange by trading volume. A notable effort in late 2016 saw the three banks use ‘miyabi’, a proprietary blockchain developed by bitFlyer, to test domestic money transfers. With some 1,500 transactions per second over a blockchain, the successful testing proved that money transfers were both faster and efficient compared to the current interbank wire system.
Blockchain Upgrades
The shared ID feature for banking consumers joins a growing list of new initiatives and research efforts by the Japanese government using blockchain technology.
Japan is embarking on a sweeping project to unify all property and land registries across urban, farmland and forested areas on a single blockchain-powered ledger. In incorporating some 230 million plots and 50 million buildings registered across the country, the ledger will also include collateral details and sale prices of properties. The register will be tested in select cities in summer 2018. If successful, the Japanese government will place its entire property register on a blockchain over the next five years.
More recently, Japan also announced plans to test a blockchain platform for processing government tenders.