Sony Bank, the online banking subsidiary of the media company, is running decentralized finance (DeFi) proofs of concept (PoCs) as part of the Japan Financial Services Authority’s (FSA’s) FinTech PoC Hub.

In particular Sony Bank is exploring the use of permissionless blockchains and automated market makers (AMMs), which take on the role of a decentralized exchange. It wants to prove to the regulator that it can comply with anti money laundering provisions. Hence, Sony Bank will show that AMMs can be used by certain verified customers using hosted wallets or self-hosted wallets that have been through compliance procedures. Additionally, it will demonstrate that token transfers can be restricted to known wallet addresses.

The context for the experiments is a DeFi Study Group to explore enabling clients to use AMMs for the trading of regulated security tokens against stablecoins.

Building on this regulatory foundation, Sony Bank’s AMM exploration represents a natural evolution of its existing blockchain initiatives. The bank has already offered security tokens to its clients, and ran public blockchain stablecoin trials more than a year ago. An AMM could combine these two separate activities for trading.

Beyond security tokens, the bank has also ventured into consumer facing blockchain products. Last year it launched Sony Bank Connect, its web3 app which provides NFTs as rewards, which clients can trade.

This consumer focused approach aligns with broader Sony Group blockchain initiatives, including the launch of its Soneium blockchain, a layer 2 Ethereum blockchain.