Bank of Tokyo-Mitsubishi UFJ (BTMU) intends to begin managing its contracts on a blockchain-based platform.
Built on technology provided by the still in-development Hyperledger project and the design services of IBM, the two companies revealed today that the platform will manage service level agreements between BTMU and other third parties, starting first with IBM.
IBM's vice president of blockchain solutions and research Ramesh Gopinath told CoinDesk the first phase of building the platform is complete, allowing the detailed tracking of workflows within the Japanese bank, with a second phase currently underway to connect workflows between companies.
Gopinath explained how the integration will work in a conversation with CoinDesk:
Today's announcement comes after two months of work to capture the entire document workflow within the Japanese bank, said Gopinath. By comparing obligations with metrics logged on the blockchain he said the bank is able to more quickly evaluate performance.
Traditionally, the is process is manual, but by building the documents into the blockchain the evaluation of the success of a project can be automated.
"If yes you get paid," said Gopinath. "If no, there are penalties."
According to a release, IBM and BTMU will first trial the service by transacting with each other over the platform. BTMU intends to ultimately migrate to the new contract management platform by the end of fiscal year 2017.
In statements, IBM said the project represents the fruit of its continued investment and research into blockchain, which was first revealed at the end of 2015 with its involvement in the Hyperledger project.
BTMU further said the project will help provide evidence that blockchain-based technology can lead to business efficiencies.
"Today, we are embarking on a journey with IBM to exploit the potential of this new technology," Motoi Mitsuishi, deputy CEO of BTMU Asia & Oceania, said.
Reporting on this article was contributed by Michael del Castillo
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.