Following the news that Japan’s Mitsubishi UFJ Financial Group is launching an open payment network built on the blockchain in 2020, Sam Murrant, Senior Payments Analyst at GlobalData offers his view:

“Where it has been adopted by major banks at all, blockchain tends to be relegated to cross-border transactions as a means of cutting through the complexities and costs of international money transfers.

“For domestic transactions, ‘instant payment’ systems such as Australia’s NPP or the UK’s Faster Payments tend to be fast and cheap enough that they obviate the need for a blockchain-based replacement – but Japan’s instant payment system, the Zengin System, is over 40 years old and starting to look somewhat antiquated compared to newer systems.

“Mitsubishi UFJ Financial Group’s new open system could do what Zengin did in the 1970s and lead the world in cutting-edge payments infrastructure – but given the very recent development of instant payments in most Western markets it seems unlikely that many countries will follow suit in the near future.”