The Bank of Tokyo-Mitsubishi, the biggest Japan’s financial body and the third largest in the world, has joined the Ripple blockchain net, as Japan accepts cryptocurrencies as a legal payment method.

The launch of the cross-border blockchain wiring service is scheduled for 2018, Nikkei reports. The Bank of Tokyo-Mitsubishi (BTMU) partners with six other international banking groups: The Bank of America Merrill Lynch, Standard Chartered Bank of the UK, Royal Bank of Scotland, Spain’s Banco Santander, Canadian Imperial Bank of Commerce and Australia's Westpac Banking.

BTMU has already tested the new cross-border system sending money from Japan to New York via the Ripple network. Initially, blockchain-based wiring system will be open for individuals, later in will expand its services to corporate clients.

Although blockchain implementation might reduce the bank’s revenues from money transferring fees, it would reduce expenses for a cross-border payments system developing and cybersecurity.

According to Brad Garlinghouse, CEO of Ripple, an average transaction time in the Ripple system is 3.7 seconds, while the bitcoin network’s average transaction takes 1-2 hours. Ripple also offers lower fees on money transfers.

 

The exchange rate of the Ripple token (XRP) has increased six times on the news of the BTMU and Ripple partnership. According to CoinMarketCap, on 30 March, XRP was trading at about $0.011 (0.0000111 BTC), while on 2 April, it grew up to $0.07144 (0.0000651 BTC). On 3 April, XRP went down to $0.0474 (0.00004181 BTC).

Ripple has climbed back to the third place in the CoinMarketCap’s ranking of the most capitalised cryptocurrencies as its market capitalisation surpassed $1.8 billion.

Japanese financial market is showing an increasing interest in cryptocurrencies and distributed ledger technologies. Since China had tightened regulations on cryptocurrency trading, Japanese bitFlyer became the biggest bitcoin trading platform in Asia. According to Bitcoinity, its world share within the last 30 days reached 11.44%.

Another impulse to cryptocurrency development in Japan is due to the new law in force from 1 April. According to the new regulations, cryptocurrencies in Japan are considered a legal method of payments and may be used for money transfer between individuals and corporate customers. It also obliges cryptocurrency companies to undergo external tax audit and reserve at least $100,000 in fiat currency.

Following the news from Japan, the bitcoin exchange rate has raised over $1,100.

Elena Platonova

Image via Flickr