Japan Explores the Future of Blockchain

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METI policy-makers appreciate the importance of blockchain tech in Japan and all of APAC. Image: 

Japan’s Ministry of Economy, Trade, and Industry (METI) recently released a comprehensive report urging the government to explore blockchain use in the country, and recognizing the importance of Interledger Protocol.

METI’s report makes two important declarations about the future of blockchain for innovation in finance in Japan:

  • Lasting change wrought in banking and finance will take place at the infrastructure level.
  • A shared protocol for interoperability is absolutely necessary for any such change to succeed.

Like many countries, Japan is examining the possibilities that blockchain technology can offer more efficient infrastructure in payments, real-time settlement and an increased number of financial actors as the Internet of Things (IoT) becomes a reality.

METI recognizes that there are a myriad of possible applications for blockchain technology and explores the financial use cases, pointing out Ripple’s head start in the industry.

“There are many use cases in the financial field, such as using a blockchain for settlement. Bitcoins as virtual currency can be considered as one of the use cases of blockchains. Various methods of use are proposed, which include remittance, settlement, transactions of securities, claims, and other various derivatives, and Islamic finance, etc. Ripple is one of the representative blockchains in this field.”

—METI, Survey on Blockchain Technologies and Related Services, FY2015 Report

However, even with the adoption of distributed ledger technology and the rise of the IoT, the world will never run on a single ledger. The need for interoperability is already pressing and will only grow. A system of innumerable ledgers will require a shared protocol to enable communication and settlement between systems and networks all over the world. METI recognizes the unique potential of the Interledger Protocol (ILP) to connect ledgers, banks, payment systems, and blockchains all over the world.

Read the full report here.