What are the applications of blockchain in Japan

Japan is the third largest economy in the world, and its government and society have a positive attitude towards the development of blockchain and Crypto. Because the creator of the blockchain, Satoshi Nakamoto, is considered to be from Japan or a Japanese, so the Japanese society is generally friendly or even supportive of the blockchain.

In terms of policy, Japan has passed the Payment Services Act (PSA) to recognize Crypto as legal property, while at the same time treating gains from transactions generated by Crypto as miscellaneous income and taxing investors accordingly. It can be said that the policy level has recognized the status of Crypto and ensured the development of Crypto in Japan.

The blockchain will continue to develop in depth in 2021 and be applied in many fields. In this regard, Japan is at the forefront of the world in terms of blockchain applications. The applications of blockchain in Japan include real estate registration, identity registration, inter-bank clearing, bitcoin insurance, supply chain finance, and consumer payments.

real estate

Previously, the Japanese government level planned to develop a large-scale project to register all real estate in towns, farmland and forest areas to a single blockchain ledger. The Japanese government will incorporate some 230 million land parcels and 50 million buildings registered in Japan into a blockchain ledger, which will also include details on the properties (such as details of collateral) and detailed prices for the sale of the properties. This move will vigorously promote the application of blockchain at the government level.

According to the Japanese government’s previous disclosure, it will be tested in cities selected in 2018. If the Japanese government test is successful, the Japanese government will put all real estate registrations on the blockchain in the next five years. Today’s progress is still in a state of testing and evaluation.

The Japanese government sought to combine all data from the government’s real estate database into a single visual data record, as a solution to the Japanese government’s previously inconsistent and fragmented data management. In Japan, local governments, judiciary and land management departments maintain their own property rights registration, which leads to problems such as irregularity and inconsistency of data. Blockchain can solve the above problems.

The traditional paper-based registration cannot be updated in time to reflect the people’s ownership of real estate. A previous survey by the Japanese Ministry of Justice showed that 6.6% of urban landowner records and 26.6% of land registration records in small and medium-sized cities and mountainous areas have not changed in nearly 50 years. The blockchain platform also enables cross-referencing of data. For example, if part of the property is arable land, the user will be recorded in the arable land register, and combined with local data, it is easier to understand who is responsible for vacant land or buildings.

The integration of Japanese real estate data can improve the efficiency of real estate transactions, help more and more vacant real estate sales in Japan, and help the government to accurately redevelop vacant land.

In 2019, Japanese real estate companies Sekisui House, KDDI Corp and Hitachi said they were piloting an information-sharing blockchain platform for real estate leasing. Telecommunications company KDDI provides authentication services, while Hitachi is using an Ethereum-based platform.

The Sekisui House sub-brand Shamaison, which owns a large collection of managed rental apartments, began a pilot program in March 2021 to launch an application that allows tenants to view, submit rental applications, and navigate the contract process (based on blockchain). Originally announced in June 2020, the pilot program aims to create a one-stop software for customers to make leasing faster and more efficient for tenants. In its 2021 Sustainability Report, Sekisui House explained that when data such as transaction history is shared between multiple computers connected to the internet, blockchain technology is ideal for securing information between multiple businesses.

In April 2020, the NEXCHAIN ​​Alliance was officially established in Japan with 18 members, including Kansai Electric, Tokyo Gas, Mitsui Sumitomo Insurance and Tokyo Marine Insurance. The purpose of the NEXCHAIN ​​Alliance is to enable secure data sharing between businesses and create new services, not just real estate related.

Authentication

In 2017, Japan’s Financial Services Authority (FSA) developed a blockchain-powered platform. The platform will enable Japanese customers to share their personal information among multiple banks and financial institutions. This platform allows bank account holders to register a shared ID, which can then be used to open accounts between different banks.

This shared ID saves the need to refill personal information when opening a new account with a new bank. Personal information and data held by this shared ID will be entered, recorded and securely stored on a shared blockchain jointly developed by the FSA and other financial institutions.

In addition, on February 26, 2019, SoftBank Group, a well-known Japanese investment company, announced that it will jointly launch a blockchain-based identity recognition and verification project with the US-based blockchain startup TBCASoft. The project plans to use zero-knowledge proofs and distributed ledger technology to protect personally identifiable information from misappropriation.

In response, SoftBank vice president Takeshi Fukuizumi said individuals should create encrypted digital identities rather than using and storing multiple usernames and passwords in places with uneven levels of privacy protection. The working group is supported by the Telecom Operator Blockchain Consortium (CBSG) launched by TBCASoft. In addition to TBCASoft and SoftBank mentioned in the article, the founding members of the alliance also include US telecommunications company Sprint and Taiwan’s Far EasTone.

Interbank Clearing

In January 2018, Fujitsu will partner with Mizuho Financial Group, Sumitomo Mitsui Financial Group (SMFG) and Mitsubishi UFJ Financial Group (MUFG) to develop a peer-to-peer remittance service using blockchain. Fujitsu has developed a cloud-based blockchain platform for the transfer of funds between individuals that the above three banks can use together, as well as a smartphone app that allows users to process money transfers, deposits and transfers. The different steps include: Withdrawal.

Previously, Fujitsu and Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group verified whether the system can link personal transfer accounts established on the platform with users’ actual bank accounts. They also further confirmed that the new platform can accurately and securely handle a range of processes, including transferring value between individual transfer accounts and clearing and settlement. They issued a statement saying the trial was very successful.

Bitcoin Insurance

Previously, 01 Blockchain compiled some hacked data on Crypto exchanges, including Japanese exchanges. Due to the frequent occurrence of theft incidents, major exchanges have launched bitcoin insurance.

Tokyo-based Sumitomo Mitsui Insurance and bitflyer (the Japanese Crypto exchange) have launched a new product that will allow the Japanese bitcoin exchange and its customers to insure bitcoin assets soon. Additionally, Coincheck is launching a similar product with Tokio Marine & Nichido Fire Insurance Co., Ltd.

According to the “Nikkei Shimbun” report, the insurance products of Sumitomo Mitsui Insurance Company and bitflyer will provide compensation services for losses caused by breach of contract or hacker attacks, with an insured amount ranging from 10 million yen to 1 billion yen (about 550,000 to 5,500 yen). million RMB). Leading the way is that the insurance product’s claims coverage also includes losses caused by internal company accidents and employee mishandling. In addition, the insurance company will also pay for accident follow-up costs, such as customer communication and litigation losses. For example, the now bankrupt Mt. Gox (which lost 850,000 bitcoins in a 2015 hack) has now received lawsuits from Canada and the United States.

Table 1 The hacking time, loss amount, etc. of Crypto exchanges in the past

What are the applications of blockchain in Japan

Data source: 01 Blockchain

supply chain finance

In April 2017, Japan’s second largest financial institution, Mizuho Bank, a subsidiary of Mizuho Financial Group, and IBM Japan announced the joint development of a blockchain trade finance platform. The platform is based on blockchain solutions designed to increase the efficiency of supply chains and trade processes. The goal of the platform is to achieve fast and secure exchange of digital transaction documents and supply chain transaction data; the immutable nature of the blockchain improves the transparency and credibility of transaction parties.

The institutional sectors involved in the platform include exporters, importers, shipping companies, insurance companies, port operators and port authorities. The above institutions will share timely and effective shipping transaction data on the platform. This will make the overall message exchange more efficient.

In this regard, Masao Sanbe, manager of IBM’s Japan sales department, said that the Mizuho Financial Group and Mizuho Bank projects marked an important step in the operation of blockchain in actual financial trade. IBM Japan By partnering with global trade networks to digitize documents and processes, IBM sees the power of blockchain to optimize trade financial services.

consumer payment

In October 2017, Japanese energy company Remixpoint launched a new electricity billing service that includes bitcoin payments to customers across Japan. In the system, customers who pay their electricity bills in Bitcoin receive a discount (about 3%). Bitcoin payments, on the other hand, are mainly handled by the company’s Crypto exchange Bitpoint.

BITPoint is a licensed Crypto exchange based in Tokyo, Japan. BITPoint has BITPoint branches in Hong Kong, Korea, Taiwan, Malaysia and Panama.

In addition to paying electricity bills, Bitpoint has partnered with airline Peach Air to offer bitcoin payments for its flights and affiliated stores. Bitpoint is also working with Evolable Asia to offer bitcoin payment options to more than 1,400 hotels and restaurants across Japan.

In this regard, Remixpoint said that their target customers are enterprises and retailers. Low-usage customers in the retail electricity market typically pay less for electricity than high-usage customers, so the savings from the new service are also smaller. The company has opened an account with Bitpoint, making it easier for customers to pay in bitcoin and save on fees. We will promote Crypto settlement in Japan by developing payment services that can reduce remittance and settlement costs, which is the original value of Crypto.

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