Japanese bank MUFG to launch a blockchain-based payments system
Mitsubishi UFG Financial Group (MUFG) has announced that it intends to launch a blockchain-based payments system by 2020. The new system will first launch in MUFG’s home country of Japan. The financial services giant partnered with Akamai Technologies, a Cambridge, Massachusetts-based digital services company.
The new system will be known as the Global Open Network Inc. (GO-NET). The two companies will be shareholders in the venture, with MUFG controlling an 80 percent stake. Hironori Kamezawa will be GO-NET’s CEO. He currently serves as the chief technological officer for MUFG.
MUFG and Akamai have been working together for over three years now. They first announced the system in May 2018, stating that they would launch it in 2019. It will be capable of processing one million transactions per second. The underlying blockchain infrastructure is capable of scaling to more than ten million transactions per second, Akamai announced in May.
In comparison, Visa only processes a maximum of 24,000 transactions per second. It’s the largest retail electronic payments processing network in the world. PayPal processes a maximum of 450 transactions in a second.
MUFG clients in Japan will have to wait until the first half of next year for the rollout. GO-NET will support and accelerate the existing payment processing systems. It will also support micro-payments, pay-per-use and other IoT-powered payment functions currently under development.
The Financial Services Revolution
The system will be based on Akamai’s Blockchain-as-a-Service (BaaS) solution. This solution enables developers to take advantage of blockchain technology without worrying about the installation and maintenance costs. It will also rely on Akamai’s cloud security and performance offerings to ensure the security of transactions.
Dr. Tom Leighton believes that this is just the first of many blockchain-based solutions that will transform the finance industry. Leighton is the founder and CEO of Akamai. He stated:
“This joint venture with MUFG sets the stage for a new blockchain-based online payment system that can better serve customers’ and partners’ payment processing needs. Akamai and MUFG are committed to delivering innovative solutions at a level of security, scale and responsiveness never before achieved.”
While Akamai will bring its expertise in technology, MUFG will bring over 360 years of experience in finance. The conglomerate is the second-largest company in Japan after Toyota and the world’s eighth-largest financial services company. With over $2.7 trillion in assets and over 40 subsidiaries, it has the experience to execute the system as well as the financial muscle to support its development.
MUFG’s CTO and GO-NET’s CEO, Kamezawa stated:
“Financial services need to embrace digital innovation to meet greater demands for security, capacity and efficiencies, and to serve the evolving market and consumer needs. Our goal is to enable rapid innovation in digital payment services, leveraging a transformative platform, with built-in security, hyper-scale and efficiencies.”
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