Yesterday the Japan Times reported that Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), will circulate its digital currency by the end of this calendar year. The blockchain-based currency “MUFG Coin” has been in the works for several years.
MUFG hopes that other enterprises will use their coin as their own currency, branded with the respective enterprise’s name. In the crypto world, they refer to these as colored coins. This way, the use of different coins on the same system would be interoperable, connecting customer bases.
The connection of economic zones such as transport and education through a single infrastructure distinguishes Mistubishi’s coin from the crowd. The firm predicts that digital wallets will eventually replace physical ones, where all a user’s payment methods are stored on one device.
The MUFG Coin and Wallet, marked for release at the end of June, hope to fit neatly into this vision of the future.
Larger international digital currency exchanges tend to concentrate on stable coins. How will MUFG legally position their cash alternative?
“Currently, we intend to position operations associated with the “coin” as exchange transactions services as defined under the Banking Act”, the firm responded.
Keen to distance the MUFG Coin from unstable cryptocurrencies, Mitsubishi aims “to eventually re-position our MUFG coin as a digital currency once clarifying the difference from cryptocurrencies, which have a lot of speculative significance.”
MUFG’s digital strategy considers cashless projects its top major initiative. Along with the wallet and currency, the plans include a global payment network announced in February. Whether this payment service, Global Open Network (GO-NET), will run in tandem with the MUFG Coin is yet to be clarified.
An ambitious initiative, GO-NET aims to “provide an open payment network in Japan based on advanced new blockchain platform” by the end of 2019. The network was established with Akamai Technologies with a 20% stake. The firm will provide the security and speed required to process the “massive traffic” MUFG anticipates.
There’s a current scramble to issue digital wallet solutions in Japan, ahead of the 2020 Olympics. The country is still a heavy user of physical cash, whereas many foreign visitors will be using digital cash. Mizuho launched the app for its J-Coin on March 1st.