Blockchain for Banking News

SMBC in digital currency trial for sustainable loans

renewable energy wind

Last month SMBC, Japan’s second largest bank, commenced work on sustainable loan trials as part of the Digital Currency Forum. The Forum is a Japanese group of 100 companies, banks and local governments that are exploring a variety of digital currency use cases, led by startup DeCurret.

One of the Forum’s working groups is for power trading. It has previously looked at using the digital currency DCJPY to settle renewable energy transactions for a blockchain trading platform.

The latest iteration is a proof of concept to make loans denominated in digital currency (DCJPY) as a sustainable linked loan based on proof of renewable energy transactions. Eneres, a subsidiary of telecoms firm KDDI, operates an energy trading blockchain used in this trial to log renewable energy transactions. This is the Forum’s first financial services demonstration using DCJPY. 

The group is also considering creating a decentralized autonomous organization (DAO) as an iteration of the same experiment. 

A separate ongoing trial for renewable power is more consumer-focused. A retail user buys renewable energy and, in addition to the energy, receives environment tokens that are attached to the digital currency DCJPY. In the first instance, they can be used to pay for bus fares, but it’s exploring deals for other places where the tokens can be used. That use case involves Kansai Electric Power and Chubu Electric Power, amongst others.

The number of stablecoin solutions is increasing in Japan. MUFG has its Progmat platform for stablecoins, tokenized securities and utility tokens. It recently set up a joint venture that includes SMBC, Mizuho, Sumitomo Mitsui Trust, SBI and others.

This week a new initiative was announced in which some regional banks are participating.

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