MUFG teams up with Akamai on new blockchain service
The new payment processing platform will have a capacity to process a million transactions per second and the ability to finalize transactions in less than 2 seconds.
Blockchain enters deeper into the world of financial services. Earlier today, Mitsubishi UFJ Financial Group Inc (TYO:8306) and Akamai Technologies, Inc. announced the development of a new blockchain service, to realize a payment processing platform with a capacity to process a million transactions per second and the ability to finalize transactions in less than 2 seconds.
The new service is set to be available from fiscal year 2019. It will leverage MUFG’s payments business expertise and the capabilities of an advanced blockchain technology implemented on Akamai’s global cloud delivery platform.
MUFG has engaged in numerous collaborative research projects with Akamai, focusing on Akamai’s high-speed network and distributed computing technology. As a result, MUFG and Akamai verified that by using this new blockchain technology under realistic business conditions, Akamai’s platform was capable to process transactions in less than 2 seconds, processing a million transactions per second. There is also potential to further develop this processing ability, permitting the handling of 10 million transactions per second.
The new payment network will be equipped with an interface that can be used as a communications network, and will include functions for the transfer and management of value through blockchain. This is set to result in a significant reduction of transaction costs for all kinds of payment services, and could support a large expansion in transaction numbers.
MUFG and Akamai, using Akamai’s globally deployed high-speed and high-security platform, will utilize this new blockchain’s high-speed processing and secure value transfer abilities to promote pay-per-use, micropayments, and other new IoT generation payment methods, and to support the diverse payment options of the sharing economy by offering an open platform.
This is not the first time MUFG participates in blockchain-related projects. In November last year, MUFG, in partnership with Oversea-Chinese Banking Corp. Limited (SGX:O39), HSBC, and the Infocomm Media Development Authority (IMDA) completed a proof-of-concept for a Know Your Customer (KYC) blockchain.
The KYC blockchain – running on a Distributed Ledger Technology (DLT) platform which enables structured information to be recorded, accessed and shared across a distributed network using advanced cryptography – allows banks to collect, validate and share customer information – with the customer’s consent – accurately, efficiently and in a secured manner. This is set to minimize the risk of the duplication of information and to reduce the need of manual checks for both banks and customers, while enhancing the quality of the customer information that is stored.
Customers’ information encrypted on the shared ledger can be easily validated by referring to government registries, tax authorities and credit bureaus. Banks can also store secured digital records of the validation process on the shared KYC platform to streamline auditing and regulatory reporting.
The prototype’s performance was tested between February and May 2017 for its functionality, scalability and security. It remained stable even with a high volume of information flow, was resistant to tampering by third parties and maintained confidentiality by permitting access to the ledger’s information only with legitimate authentication.