Japanese Banks' Payment Clearing Network

Result of a Proof of Concept
in New Interbank Settlement
Platform Utilizing Blockchain
TechnologyJapanese Banks' Payment Clearing NetworkMarch 18, 2019

1Japanese Banks' Payment Clearing Network

Outline of the PoC

Objective• To realize RTGS※ of small-value payments by using blockchain technology ona new interbank settlement platform that utilizes digital currency.
※ Real-Time Gross Settlement. Settlement process that transfers funds for each transaction without settlement risk.

【PoC Overview】
The overview of the PoC is the following.
①Issuance: Zengin-Net issues digital currency based on application from banks.
②Transfer: Settlement is achieved by transferring digital currency between sender bankand receiver bank.
③Collection : Zengin-Net collects the digital currency based on application from banks.
Platform for transactions thattrigger interbank settlement

Primary scope of PoC

Members
Participating
Banks

Member banks of board of directors(Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation,
Resona Bank, The Joyo Bank, THE BANK OF FUKUOKA,
THE NISHI-NIPPON CITY BANK, Sumitomo Mitsui Trust Bank,The Keiyo Bank)

SystemVender

Fujitsu Limited

SupportVender

NTT DATACorporation2

Japanese Banks' Payment Clearing Network

ResultOverall conclusion• We concluded that blockchain technology can be useful for RTGS in the newinterbank settlement platform.

Summary results of functional and non-functional aspects
What we assessed

Remaining issues

Whether the digitalcurrency for interbank
settlement
appropriately functionsin the RTGS

Processes(issuance/collection/transfer ,etc. )worked appropriately〇

To specify the details offunctions considering
actual operation

Availability

Whether the structure
ensures business
continuity in the eventof system failure

Business continuity
capability ensured in theevent of a single server
failure and degraded
operations of all servers〇

To consider performancedecrement during
degraded operationperformance

Whether it is able torealize required
response※１ andthroughput※２
performance

Target throughput
performance(1,000/sec) achieved〇

To minimize delay inchecking balance(throughput reduction)
when transaction
volume increases

security

Whether it ensuressufficient tamperresistancy

Sufficient tamperresistancy achieved〇

To enhance security
measures considering
actual operation

Functional aspect

Nonfunctionalaspect

Result※1 The response time of the system. ※2 Volume of transactions processed per unit time.

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Japanese Banks' Payment Clearing Network

Future Efforts【Expected Roles of Zengin-Net】
 As an only funds clearing agency operating the payment and settlement system
in Japan, Zengin-Net should continuously discuss the efficiency of "interbank
settlement" which is a cooperative domain of the banking industry, and thenext-generation payment and settlement infrastructure.

【Understanding of the environment】
 In that discussion, we should take into account changes of environment
surrounding the Zengin-Net, such as the promotion of cashless across thecountry and the new services for person-to-person remittance and payment byvarious players.

【Future Efforts】
 Based on the above, in order to turn the knowledge and experience gained fromthis PoC into more concrete initiatives, we will continue to make an effort todiscuss with the stakeholders about issues such as use cases in the "newinterbank settlement platform".
 In addition, we will follow up on technical trends related to blockchain
technology issues that have been revealed through PoC, and will also conduct
research and study on important technical elements for discussing theaforementioned use cases such as API connections, etc.

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