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Using BlockchainTechnology to Promote Regional Development: Announcement of the Start of Collaborative Research in Smart Local Currencies

The University of Tokyo, The University of Aizu, Center for Global Communications (GLOCOM, below) of International University of Japan, and Soramitsu Co., Ltd. (Soramitsu, below), created a joint research project on June 20, 2016, to study local currencies and their effects on regional development. This project focuses on the area around Aizu, in Fukushima Prefecture, Japan, and will include experiments using local currencies running on blockchain and distributed ledger technology.

Background
Blockchain technology is what powers the digital currency Bitcoin. It allows all transactions from the past to be recorded in a continuous way, where the provenance of each transaction is verifiable and the data are tamper resistant. Furthermore, the transaction data are shared among nodes on a peer-to-peer network, making the entire system resilient to attacks and Byzantine failures. The digital currency Bitcoin was the first in the line of cryptocurrencies, which offer a new channel for payment and economic activity. Because all the transactions are shared across all the nodes and no one can stop payments from occurring, many revolutionary services can be created using blockchain technology.

Blockchain technology can be used to bring local currencies to life, providing new features to create “smart money,” through the use of so-called “smart contracts.” Smart contracts can be used to create programmable money, where the conditions of transacting can be enforced by computer programs. The current research is studying the possibilities of using blockchain technology to create smart local currencies, with an emphasis on economic research to determine the contribution of local, digital currencies to regional economies.

The University of Tokyo (Interfaculty Initiative in Information Studies; Professor Hideyuki Tanaka) will study the effects of information technology on economics and network economic effects.

Through the University of Aizu OpenAppLab and regional technology center, CODE for AIZU, the ability of local currencies to solve regional problems will be studied.

GLOCOM founded the Blockchain Economics Research Lab in March, 2016, and is studying the impacts of blockchain technology on socio-economic systems. GLOCOM often hosts seminars and research salons on blockchain technology and will continue to provide resources for the advancement of this technology into society.

Soramitsu is a blockchain fintech startup, focusing primarily on creating a digital identity platform using blockchain technology. Soramitsu is a member of the Hyperledger project, which is being managed by the Linux Foundation. The Hyperledger project aims to create software standards for blockchain and distributed ledger technology.

Overview
Development of a platform for creating local currencies has already begun and in the Fall of 2016, Aizu will host various tests using local currencies. Contributions from the various members are as follows.

The University of Tokyo:General management, economics and regulatory research

The University of Aizu:Business support, blockchain research and engineering

GLOCOM:Economic and business modeling research

Soramitsu:Blockchain system engineering

Press Contacts
Hideyuki Tanaka
The University of Tokyo
7-3-1 Hongo,Bunkyo-ku, Tokyo, Japan 113-8654
TEL: +81 3 5841 5921

Yasushi Fujii
The University of Aizu
Aizu-Wakamatsu City,Fukushima-ken, Japan 965-8580
TEL: +81 242 37 2533

Soichiro Takagi, Kumiko Ando
GLOCOM
Harks Roppongi Bldg. 2nd floor,6-15-21 Roppongi, Minato-ku, Tokyo, Japan 106-0032
TEL:+91 3 5411 6677

Makoto Takemiya, Ryu Okada
Soramitsu
No. 2 Watanabe Blg. 7F, 1-7-3 Higashi Azabu, Minato-ku, Tokyo, Japan 106-0044
TEL: +81 3 5843 8914
www.soramitsu.co.jp

2016-09-07