Japan Firms to Test Int’l Remittances Using Cryptocurrency Tech

May 14, 2018

Tokyo- Japan's Mitsubishi UFJ Financial Group Inc. and other companies will test international remittances using a distributed ledger technology developed by U.S. cryptocurrency startup Ripple, informed sources said Monday.

The demonstration test, seen starting as early as this month, will also involve Japanese trading house Mitsubishi Corp. <8058> and British financial giant Standard Chartered PLC.

The participants aim to put the results of the test into practical use within years.

In the trial, Singapore-dollar funds will be sent from Thailand to Singapore.

Specifically, a Thai unit of Mitsubishi Corp. will transfer the funds from an account at Bank of Ayudhya, under the wing of the Japanese megabank group, to a Standard Chartered account in Singapore held by an affiliate of the trading house.

At present, international money transfers between banks go through the network of the Society for Worldwide Interbank Financial Telecommunication, or SWIFT. It usually takes days to complete the procedure, and remittance costs are high.

Ripple's technology does not require a big centralized transaction management system, making it possible to set low remittance fees.

With the technology, it will take only a few minutes to send money, while data falsifications and other wrongdoings will be difficult, the sources said.

Mitsubishi UFJ hopes to use the technology also for international remittances between individuals, the sources also said. Jiji Press