Mitsubishi UFJ Financial Group (MUFG) is launching an initiative to open a new exchange and issue its own virtual currency: the “MUFG coin.”
By controlling the exchanges themselves, MUFG plan to suppress fluctuations in the price of MUFG coins in order that they can be used stably for settlement and remittance. The MUFG coin, due to their distribution being made available on a centralized exchange, can be directly overseen by the bank. In addition, the bank can also control the value of the coin, which is aiming to be worth approximately 1 yen. Users can then use these coins, accessed from their smartphones, to pay for goods and services in a secure fashion.
MUFG is aiming to increase adoption with suppliers and retailers throughout Japan for the payment platform and is aiming to launch later in the year. The move demonstrates how cryptocurrencies and blockchain tech are slowly being realized by traditional financial institutions, who are eager to benefit from the reduced operational costs that virtual currencies can offer.
Legislative Hurdles and Financial Regulation
MUFG has already notified the Financial Services Agency on their plans to issue coins and open an exchange. Bank of Tokyo-Mitsubishi UFJ will make full preparations for the MUFG coins issuance, with plans to organize contests to generate ideas for business usage of the MUFG coins in March.
In order to establish a virtual currency exchange in Japan, it is obligatory to register with the Financial Services Agency, and there are still some hurdles left. As the Fintech industry continues to grow, further legislation for responding to new services like MUFG will continue to be developed in the country. Bitcoinist previously looked at the state of the Fintech industry in Japan here.
Online Responses To The MUFG coin Announcement
Users took to Twitter to voice their opinions on the upcoming coin launch. They were quick to point out that the MUFG coin is not OMG and that the price is to be capped at 1 yen per coin.
Mainichi Shimbun:
Japan's largest bank, MUFG, is *planning* on launching a #cryptocurrency exchange. Even the largest bank of the country can no longer ignore the exponentially increasing demand for bitcoin and the cryptocurrency market.
— Joseph Young (@iamjosephyoung) January 15, 2018
It's not related to $OMG. We Japanese don't take it seriously. I think MUFG Coin will fail. Nobody is gonna use it.
— ヒロ(Blockchain Hero) (@btc883n) January 15, 2018
This is a MUFG coin by Mitsubishi Bank Japan. The value is ¥1 = 1UFJ coin. It has nothing to do with J-coin or OMG. Just like to clarify this to Crypto enthusiast outside of Japan. The government will regulate the coin so it won't be more than ¥1 / coin.
— Edward (@ETHtrenpreneur) January 15, 2018
The Mitsubishi UFJ Financial Group, headquartered in Chiyoda, Tokyo, is Japan’s largest financial group and is the 2nd largest bank holding company in the world, holding around $1.8 trillion USD.
Will we see increasing cryptocurrecy initiatives such as this, with centralized banking controls? Do they offer the same degree of security as other decentralized cryptocurrencies? Let us know what you think in the comments below.
Images Courtesy of Bitcoinist archives, Twitter/@iamjosephyoung, Twitter/@btc883n, Twitter/@ETHtrenpreneur, and Pexels.