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Back in 2017, Japan’s three largest banking groups – Mizuho, SMFG, and MUFG – have started a joint venture of a blockchain-based peer-to-peer remittance service linked to mobile phone numbers email addresses. At the time, the global digital payment market was valued at USD $2,898.54 billion and is expected to grow to USD $6,490.72 billion by 2023 along with a CAGR of 13.7%, during the FYs 2018-2023.
Moreover, the emergence of digital currencies & payment channels has out-fashioned the traditional way of cash payments. Having the above-mentioned parameters in mind, the Japanese megabanks had planned for peer-to-peer mobile remittance that is based on blockchain technology. Sadly, the plan couldn’t see more than certain phases of development, deeming the project redundant as almost every financial institution is developing their own digital services including cryptocurrencies.
The group of Japanese megabanks Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group had planned to use blockchain technology that powers popular cryptocurrencies like Bitcoin. According to the blueprint laid by these banks, newly created P2P payment channel would allow users to send or receive the funds using their phone numbers or email addresses through virtual accounts tied to their deposit accounts. Various tests were conducted during the fiscal year 2017 and the group was planning to offer trials in 2018.
The cancellation was disclosed by the Japanese Bankers Association led by the CEO of Mizuho Bank Koji Fujiwara at a Financial Services Agency public-private council whose goal was to hold a discussion on increasing the poise of the country’s payment environment. The main argument behind the cancellation is apparently the individual creation of digital currencies by each bank, which makes a collective venture unneeded:
“With the megabanks also preparing their own digital currencies, such as MUFG Coin and Mizuho’s J-Coin, doubts were raised about the need for the joint service.”