October 31, 2017 -
The Financial Services Agency (FSA) of Japan, one of the country’s main regulators, is working on an initiative aimed at delivering a new digital ID powered by blockchain technology that will make banking more efficient for Japanese consumers, according to a report by Secure ID.
Based on early reports and interest in the technology, the effort could lead to improved government services for Japanese citizens.
The FSA is partnering with Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui and Mizuho on a shared digital ID system based on blockchain, which provides a secure and public permanent record of all transactions that occur between two parties.
As a result, any two-way transactions become registered and available to all participating individuals to consult — completely independently of a central authority — to retain that record.
The financial authority and its banking partners are looking to form a system that enables consumers to open accounts at various financial institutions.
Under this system, a consumer with an account at one of the participating banks would use the blockchain-powered digital ID to access banking services at other banks involved in the program.
Those consumers would be able to use an app to confirm their identities by biometrically authenticating themselves via fingerprints or facial recognition software, saving them time.
Opening a bank account in Japan usually requires ID authentication via mail, which can reportedly take up to a week to complete.
The FSA says it wants to begin testing the blockchain-based digital ID in the country in November, but did not specify the scope of that initial work, or when it would invite other financial institutions to join the program.
Dai Nippon Printing plans to build machines that issue cash cards to consumers using the blockchain technology, as well as leverage facial recognition technology and “scans of chips embedded in driver licenses and other ID cards,” according to Banking Technology.
Other reports state that Japan is seeking to use blockchain-based digital IDs to establish a national property registry that also includes sales prices.
Japan is also researching similar technology for the publication and awarding of government contracts.