Banking Outage in Japan: 128 Banks 'Frozen' at Once

Black Friday in the land of the yen. Bitcoiners have been repeating "Not your keys, not your coins" for over a decade, and the mantra echoed on X on November 6 as the alert "128 banks frozen in Japan" spread. ATMs, counters, and apps across the western part of the archipelago had just stopped responding.

The story is spectacular. The events revolve around a hardware failure lasting five and a half hours, with no cyberattack or account freezes, at a time when the country's three megabanks are preparing their yen stablecoin.

Key points of this article:

• A hardware failure in the Western data center cut off 128 shinkin banks on Friday around 1:30 PM Tokyo time.
• All services resumed at 7:05 PM, and the operator detected no intrusion.
• The freezing scenario does not hold, but the dependence of 236 institutions on a common platform is very real.

The Japanese Banking Outage Lasted Five and a Half Hours

The blockage began around 1:30 PM in Tokyo, which is 5:30 AM in Paris. The Shinkin Central Bank and the Shinkin Kyodo Center, which operates the shared IT system of the network, found that nothing was going through.

Shinkin banks are regional cooperative banks, distant cousins of our mutual banks. Their clientele? Mainly merchants, artisans, and local SMEs.

The 128 institutions from Tokai to Kyushu were affected, except for Okinawa. Withdrawals, deposits, and transfers became impossible at ATMs and counters of the 3,430 affected branches. Online banking followed the same path.

A merchant who is a client of Seishin Shinkin told Shizuoka Asahi that he cannot afford to be without cash when he needs it.

The return to service happened in stages. According to ANN, all services were functioning again by 7:05 PM.

128 Banks Frozen or Just a Server Down

The term "frozen" circulated among English-speaking and then French-speaking crypto accounts. It suggests a decision by an authority to block withdrawals to prevent panic. No regulator moved, and no one queued to empty their accounts.

The Jiji agency reported that the operator ruled out any cyberattack in the afternoon, citing a hardware failure. The Asahi newspaper located the fault in the communication equipment of the Western center, one of the two sites that run the common system. Other Japanese media pointed to a storage unit.

These 128 banks had also switched to an updated version of the system in mid-October, according to Sankei. ANN directly links the outage to this upgrade.

The balances remained intact, simply out of reach for an afternoon.

A Single Shared System for 236 Banks

The common system serves 236 of the 254 shinkin in the country, over 90% of the network, with one site for the East and one for the West. When the latter falters, half of the sector stops suddenly while the East continues to operate.

And the archipelago is not new to this. In October 2023, the interbank network Zengin crashed for the first time since its creation in 1973, with over 5 million transactions delayed over two days. On January 29, 140 shinkumi credit cooperatives also lost part of their services.

This is where the bitcoiners' argument holds. The Bitcoin network has no Western center: thousands of nodes validate blocks, and on Friday they continued to do so. With your keys in hand, no one can stop you from moving your BTC at 1:31 PM.

However, your bitcoins must be in your own wallet. Those left on an exchange platform run on servers as centralized as a shinkin center, and Coinbase was paralyzed for several hours in May during an Amazon Web Services outage. The Shinkin Kyodo Center has not yet provided the exact cause of the failure.

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