Bank of Tokyo-Mitsubishi UFJ (BTMU) has signed a contract with IBM to examine the design, management, and execution of contracts among business partners using blockchain technologies.
The two companies will begin by piloting blockchain to automate business transactions between the two companies, IBM announced in a press statement on 16 September 2016.
This is one of the first projects built on the Hyperledger Project fabric, an open-source blockchain platform, to use blockchain for real-life contract management on the IBM Cloud.
IBM and BTMU have built a prototype of smart contracts on a blockchain to improve the efficiency and accountability of service level agreements in multi-party business interactions. The bank will begin using it to manage contracts within their business in fiscal year 2017.
IBM and BTMU also aim to manage agreements between the two companies with the system, by the end of fiscal year 2017.
To improve efficiency, IBM and BTMU will monitor delivery and usage of equipment with a sensor that embeds information into the blockchain. This will then automate invoicing and payment processes between the two companies.
"Blockchain technology has the potential to change not only the financial world, but also other areas of the business world, leading to improved efficiency of the end-to-end business process," said Motoi Mitsubishi, Deputy Chief Executive Officer of BTMU Asia & Oceania and General Manager, Singapore Branch and Corporate Banking Division for Asia & Oceania.
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