The president of Japan’s largest bank and financial group (MUFG) has claimed that the bank’s own digital currency, MUFG Coin, will do one better than bitcoin.
The Bank of Tokyo-Mitsubishi (MUFG), Japan’s largest bank, revealed plans toward developing its own digital currency in early 2016. Dubbed “MUFG Coin”, the digital currency – based on a blockchain – is set at a fixed conversion rate of one coin equal to one Japanese yen. MUFG retail customers will be able to withdraw money from their bank accounts through an app on a smartphone which will then be converted to the digital currency. As reported by CCN in mid-2016, MUFG is also launching two-way ATM machines in spring 2018 where users will be able to withdraw the digital currency onto their smartphones or change MUFG coins into yen.
With trails beginning as early as fall 2015, the endeavor could soon result in the world’s first ever digital currency issued by a major bank.
Speaking at the Fin/Sum Week 2017, a FinTech conference in Japan, MUFG president Nobuyuki Hirano acknowledged the growing awareness and adoption of digital currencies like bitcoin in the country, soon after its classification as a legal method of payment earlier this year. For Hirano, the bank’s own digital currency will look to alleviate “issues” surrounding bitcoin, referring to the cryptocurrency’s volatility.
In quotes reported by the Nikkei, Hirano said:
[The bank plans to] overcome issues of [existing] virtual currencies and create a highly useful currency.
The report also cites that MUFG is hoping to garner support for ‘MUFG Coin’ from other banks. However, competitor and fellow ‘megabank’ Mizuho has also been testing its own digital currency, developed in partnership with IBM Japan. As reported by CCN in late 2016, Mizuho put its digital currency – where a single digital token is also equivalent to a single yen – through a successful app-centric trail in the scenario of a group dinner party. Based on blockchain technology, the tentatively titled ‘J-Coin’ also sees support from other banks ahead of an intended launch prior to the 2020 Tokyo Olympics.
Japan, for all the notions of being a technology-forward society, still sees cash settlements amount to 70% of all transactions of value. With digital payments accounting for a measly 19%, Japanese authorities have mandated a FinTech growth strategy to double the adoption rate of digital payments over the next decade in playing catch-up to China and Korea in cashless payments.
MUFG began issuing its digital currency to employees in May on an experimental basis in May 2017, ahead of a reported commercial rollout before the end of the year.