The banking arm of the Mitsubishi UFJ Financial Group’s (MUFG), the Bank of Tokyo-Mitsubishi UFJ, is reportedly planning to trial its in-house cryptocurrency in 2019 following years of development.
As Japan’s largest bank, MUFG could become the world’s first major financial institution to deploy its own cryptocurrency after a local report by Japanese publication NHK confirmed plans toward a sweeping trial involving as many as 100,000 MUFG retail bank customers.
Account holders will have to apply to take part in the trial which will enable participants to install a smartphone app which converts their fiat yen deposits in their bank accounts to units of ‘MUFG Coin’. The conversation rate of one unit MUFG coin will be equivalent to one yen.
‘They will be able to use the currency to make payments at places like restaurants, convenience stores and other shops,’ an excerpt from the report read. ‘They can also transfer the currency to the accounts of other participants.’
Bank officials will assess whether settlements and peer-to-peer transfers through the app are secure and efficient at a scale of 100,000 users after conducting successful in-house trials among employees for over a year.
As reported previously, MUFG coins will also look to bring in users of existing prepaid electronic money platforms with low commission fees levied for any payments, including international remittances. Users will also be encouraged to exchange MUFG coins with foreign currencies at airports at markedly lower commission rates.
‘If MUFG coin is used for overseas remittances, it is estimated that the commission will be cut to less than one-tenth of that of the current cost of several thousand yen per (international) transaction,” read an excerpt from a local report after the bank began issuing MUFG coins to employees on an experimental basis last year.
The bank is reportedly developing a two-way ATM machine to allow users to ‘withdraw’ MUFG coins onto their smartphone or exchange the cryptocurrency into yen.
One of the biggest banks in the world with over $2.6 trillion in assets, MUFG first announced plans to develop a cryptocurrency as early as 2015 before publicly confirming the blockchain-powered coin in early 2016.
At this stage, the launch and issuance of MUFG coins is an inevitability, with MUFG president Nobuyuki Hirano previously stressing the in-house cryptocurrency would “overcome issues of [existing] virtual currencies” like volatility “[to] create a highly useful currency”.
Indeed, MUFG Coin could be sold and exchanged at MUFG’s own rumored cryptocurrency exchange sometime in the near future.