In the wake of bitcoin trading becoming new mainstream in Japan, the leading financial institutions are stepping in to maintain their market share. The country’s largest bank, MUFG is planning to launch its own exchange, a cryptocurrency, and bitcoin separate accounts for clients of other exchanges.
MUFG Coin and Exchange
The fourth largest bank in the world, Mitsubishi UFJ Financial Group, Inc., is all set to launch its own cryptocurrency exchange this financial year. It has been reported that MUFG has already notified the decision to launch an exchange to Financial Services Agency (JFSA).
The bank is currently working on issuing its own cryptocurrency “MUFG coin”. The MUFG’s move to control the exchanges themselves allow them to suppress the fluctuations in the prices of MUFG coins. The plan to control the exchange enables MUFG to use this cryptocurrency for settlements, remittances and shopping stably. The idea is to keep this new pegged cryptocurrency at around JP¥1 meaning its worth would be about 1 yen. However, this will not be fixed in advance in order to bypass the regulations related to issuing and transmitting a private money as such in Japan.
The aim of MUFG is to increase the adoption of this cryptocurrency as a payment platform throughout Japan, which would be launched later in the year. This move is the testament to how blockchain tech and cryptocurrencies are realized by the traditional financial institutions that benefit from its reduced operational costs.
The primary motive is to use the coin to make stable transactions in Japan but once the cryptocurrency gets out in the world, it can be used for other uses too.
Though there isn’t an official name of MUFG coin yet, it looks like a rough equivalent to the US Dollar Tether (USDT). The way USDT is used by a few exchanges to digitize their flat currency reserves for blockchain usage, later on, MUFG can be used in trading pairs on non-fiat exchanges instead of USDT.
Bitcoin Segregated accounts
Another important task MUFJ Trust is working on is to bridge the gap between crypto and fiat with a segregated bitcoin account. They will keep the client holdings in accounts that can be linked to exchanges but the money won’t be sent to their control. This will help in protecting the funds against loss in the event of failure or breaches in the exchange.
This service can be expected to get launched in April 2008 or as soon as Japan FSA identifies bitcoin as an asset to be placed in a trust. However, this service would be available only for bitcoin at first. Also, according to its application for patent protection, this will be the first of its kind trust arrangement for cryptocurrencies.
So, what do you think of this move made by Japan’s largest bank? Who would be the next cryptocurrency trading service to go global? Let us know your thought in comments below and follow or write us on twitter and facebook page.
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.