Mitsubishi UFJ Financial Group (MUFG) is one of the biggest banks in the world. It recently announced that it will be taking a previously announced blockchain-based payments network to the next level of development. Mitsubishi UFJ is the biggest financial group in Japan and has been a long-time supporter of blockchain development.
The blockchain-based payments platform will be able to handle more than a million transactions per second. Mitsubishi UFJ will be teaming up with US-based fintech firm Akamai Technologies to make the platform a reality. The two companies plan to form a new company which will be majority owned by Mitsubishi UFJ, with Akamai Technologies holding a 20% interest in the new venture.
According to the information supplied by Mitsubishi UFJ, the new blockchain-based payments platform will be ready, “by the first half of 2020.” The new platform will be called, “Global Open Network,” and may be integrated with internet of things (IoT) technology and Akamai’s cloud computing platform.
Mitsubishi UFJ is Looking to the Future
Mitsubishi UFJ is sinking more than $1.5 million USD into Global Open Network. It is a relatively small investment in the blockchain space, but it could grow to be a very influential platform. MUFG does a large business in trade financing, and they may be looking for ways to leverage blockchain to cut inefficiency in global trade.
Last year MUFG took part in the first syndicated loan to be settled via blockchain, with a platform that was designed by Spanish bank BBVA. According to Akamai, Global Open Network will support pay-per-use, micropayments as well as “developing IoT-enabled payment transactions.”
The potential for blockchain-based systems in global trade is enormous. MUFG isn’t alone in looking for ways to use blockchain in the logistics sector, but their position as a premier Japanese finance company may give them a competitive advantage in the Japanese import/export sector.
How Blockchain Works for Logistics
There has been no shortage of blockchain platforms that are aimed at revamping the global shipping industry. IBM and Maersk have perhaps been the most successful in building up thousands of connections with their Tradelens platform, which is currently in use.
The idea behind most of the blockchain platform that operate in the logistics sector is a simple one: everyone involved in the shipment of good has access to real-time information, can see where the goods have originated, and who has handled them so far.
Making Complex Systems Simple
A successful test that was led by Commonwealth Bank of Australia (CBA) last year demonstrates how complex global logistics are, and how blockchain can make a big difference. CBA also works with trade finance, and they used an in-house blockchain platform to track a shipment of Almonds from where they were grown in Victoria, Australia to their destination port in Hamburg, Germany.
It might seem simple, but moving seven tonnes of almonds across the globe involved Olam Orchards Australia Pty Ltd, Pacific National rail, the Port of Melbourne, stevedore Patrick Terminals and shipping carrier OOCL Limited.
Managing Director of Industrials and Logistics in Client Coverage at CBA, Chris Scougall, commented that,
“Our blockchain-enabled global trade platform experiment brought to life the idea of a modern global supply chain that is agile, efficient and transparent. We believe that blockchain can help our partners reduce the burden of administration on their businesses and enable them to deliver best-in-class services to their customers.”
Who Will Come out on Top?
No matter which platform ends up becoming the industry darling, it is clear that blockchain is probably going to be the backbone of the global shipping industry. The real opportunities for efficiency probably exist in synergizing multiple platforms, so that there is one interface that offers broad-spectrum information to everyone in the supply chain.