Banking News

Japan’s SBI involved in blockchain project to digitize “premium vouchers” for low-income families

digital payment

The Japanese firm Kyushu Electric Power has announced that it will provide a blockchain platform to the Fukuoka-based regional bank Chikuho Bank to help it digitize the “premium vouchers” for low-income families. Chikuho Bank will, in turn, work with the Ukiha City Chamber of Commerce to distribute the vouchers in the small Japanese city Ukiha. Previously, SBI helped Chikuho Bank to issue a local digital currency, “Changwa” which is being used in the app.

“Premium vouchers” were introduced to Japan in October 2019 to protect low-income families and families with children from the effects of a consumption tax hike. The vouchers are worth 25,000 yen ($234) and limited numbers can be bought by these families for 20,000 yen ($187), with the government covering the rest of the cost.

Two issues with the vouchers have led to a move to digitization. First, estimates say the “printing and distribution costs” of physical vouchers for the government could be very expensive and reach up to 30 billion yen ($281 million). More urgently, the coronavirus crisis has made physical distribution far more difficult and potentially dangerous, with widespread concerns over congestion at distribution points.

In the announcement, Kyushu emphasized that digitization of the vouchers using DLT will make the process of distribution far simpler and more “streamlined”. SBI Holdings, who are affiliated with Chikuho Group, have meanwhile played up the “convenience” of the new system for everyday people and its importance for safety in a “post-corona society”.

Although this development only impacts a few of the families who receive “premium vouchers”, Kyushu says it plans to continue working with governmental and financial institutions to achieve further digitization of the vouchers.

SBI is one of the most active companies in Japan when it comes to blockchain. It launched Money Tap, the Ripple powered payments app with 35 banks. It has joint ventures with both Ripple and R3 and numerous blockchain investments, including in insurance consortium B3i and digital assets platform Securitize