Japan’s biggest lender, Mitsubishi UFJ Financial Group (MUFG), will circulate its own cryptocurrency that has been in the works for several years in the second half of 2020. Dubbed “MUFG Coin,” the digital currency will be unveiled in partnership with HR firm Recruit Holdings.
Reports in the Japanese newspaper Mainichi Shimbun said Mitsubishi UFJ would roll out its digital token through a smartphone payment app for member companies listed on Recruit’s website, according to bank President Hironori Kamezawa.
Recruit, which operates online and offline services for travel, housing, restaurants, beauty, automobiles, and education promises to leverage the new coin to create a borderless shopping experience.
The new coin is reportedly allowing the customer base to purchase goods and services from restaurants, convenience stores, and other shops, as well as make transfers to the accounts of other participants.
Despite the much-publicized news by Japan’s biggest bank, MUFG Coin is, in fact, a step back from the previous plans for a sweeping cryptocurrency launch. The world’s fourth-largest bank by assets and the largest non-Chinese lender will instead use the new coin in a mobile payments business. It previously said it would allow other enterprises to use the coin and white label the technology as their own offering, branded with the respective enterprise’s name.
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The new initiative will be exploring many different applications, and the exchange rate of one MUFG coin will be equal to one yen.
The company is also said to be investigating other ways to leverage the tokenized digital currency and its underlying blockchain technology across its banking services. It has recently backed a $14 million new investment in San Francisco-based startup, Securitize, which helps firms to tokenize their securities and assets.
The move came a few years after the banking giant has joined the blockchain-based “utility settlement coin” (USC) project, becoming one of the more noteworthy firms in the Asia-Pacific region to hop on the cryptocurrency bandwagon.
Within that context, MUFG Securities, its securities subsidiary, has been working more closely with Ripple’s interbank group Global Payments Steering Group (GPSG). This collaboration intends to test moving real funds over RippleNet – Ripple’s enterprise blockchain network.
Like many other companies, MUFG is exploring ways to leverage the power of blockchain technology. A similar attitude toward digital currencies has been developing recently, with many tech giants already announcing trial runs of prototype cryptocurrencies, which could serve as rivals to the likes of Bitcoin and Ethereum.
The latest initiative itself is the result of the J-Coin project, which was launched through a consortium of banks in 2017, and won support from Japan’s central bank and financial regulator to be ready for the 2020 Tokyo Olympics.