Hitachi and the Bank of Tokyo-Mitsubishi UFJ (BTMU) have recently announced the beginning of Proof-of-Concept (PoC) testing to develop a Blockchain-based system for the digitalization of checks in Singapore. Is this a new era of using Blockchain as a replacement for paper checks?
According to the official release, using the system, BTMU issues and settles checks, and Hitachi Group companies in Singapore receive the electronic check and deposit the funds. This would mean a faster and safer payments option using electronic checks. It states:
“With applying blockchain technology, it is expected to reduce system investments and to realize providing reliable and convenient financial services.”
The new system of Hitachi and BTMU electronic checks should be launched by 2018.
Joel Binn, Founder at Crypto Currency Corp and a member of the Hitachi Advisory Institute commented to CoinIdol.com:
“Using blockchain as a replacement of paper checks is an excellent use case; but the real question should be, is it better than current alternatives that exist in today's world? Electronic payment options, B2B, C2B, B2C abound with mature market service organizations in place. Everything from Paypal, ApplePay, credit cards, bank transfers and literally dozens of companies exist in this arena. Paper checks have been greatly reduced in the US markets but it still persists for a variety of reasons, but this is coming to an end.”
Jacob Ninan, former staff member of Hitachi and eBay, working today as Peer Reviewer at the Fund for Innovations and Technology Development Macedonia and founder of Kottackal Business Solutions Pvt. Ltd., a cross-industry consultancy based in India and Switzerland, commented to CoinIdol.com:
“Hitachi Asia Singapore is the regional HQ for Hitachi which hosts many centralised functions like International Procurement and Payments for projects for the region. Having a centralised ledger and bringing their stakeholders (vendors, group companies, partners etc.) together can be used to leverage the advantages of Blockchain. As pointed out in the release, more automation may be implemented with ideas like Smart Contracts.”
This is not the first time the Bank of Tokyo-Mitsubishi UFJ is working with Blockchain technology for its financial services improvement. In May 2016, Bank of Tokyo Mitsubishi UFJ and Mitsubishi UFJ Financial Group Inc. confirmed their plans to create their own digital currency using Blockchain technology in 2017.
However, speaking about BTMU and Hitachi’s new PoC testing, Joel Binn noted:
“The real interesting fact is what do you consider as a value add for a blockchain solution entering this field. Do you expand the market reach? Can it add to regulatory and surveillance requirements? Is there more security than existing market spaces? Why would one switch from paper to a blockchain solution and not use the many other solutions that exist? These are real questions that plague blockchain solutions in general. There is an important place for blockchain in the future of all the financial world, but is this a good launch point? It will be interesting to see what happens.”
Representatives of the Bank of Tokyo-Mitsubishi UFJ were unavailable for comment at the time of publication.