The Tokyo-Mitsubishi UFJ Bank (MUFG), the largest bank in Japan, is going to develop its own cryptocurrency as part of its blockchain research. The project bearing the name “MUFG coin” was launched last autumn. The new digital currency relies on a P2P system that uses smartphones to verify the existence of digital tokens.
The MUFG coin project aims at sizable savings in managerial costs, transaction fees and tariffs associated with international remittances. The developers intend to prove that there is no need to rely on the blockchain’s distributed network of miners.
“MUFG coin takes advantage of the new technology that is on a network of multiple small computers. It is possible to cheaply build a tamper-resistant “transaction record of the ledger,” referred to as the “block chain””, says the report from The Asahi Shimbun.
Tokyo-Mitsubishi UFJ is also one of 42 members of the R3CEV consortium. The goal of the project is to broaden the usage of blockchain among financial institutions. Initial test with participation of 11 banks has already been conducted. The main idea was to transfer “Ether” (Ethereum’s equivalent of bitcoin) between the banks. The test showed that such transactions were settled almost instantaneously. To compare, traditionally banks need several days for settlement, depending on the asset class.
Tokyo-Mitsubishi UFJ is not the first bank that is working on the development of its own cryptocurrency. People’s Bank of China has a special team created in 2014 that has been studying cryptocurrencies and is preparing the launch of a new one now. The bank considers operating with digital currencies profitable as it allows cutting the costs of circulating traditional paper money and boosting policymakers’ control of money supply. Moreover it can increase the transparency of economic activities fighting money laundering and tax evasions and thus leading to better economic and social development.
Japan has definitely burst into action in bitcoin industry. Japanese venture capital firm SBI Investment has announced a new investment in bitcoin exchange Kraken. The amount of the investment is kept under wraps. However it was called “multi-million”.
The SBI Holding has invested in more than 200 companies in 20 countries choosing such spheres as financial services, asset management and biotechnology. Annual revenue makes up over $2 billion.
“SBI’s investment means a lot to us,” says Kraken Chief Executive Officer Jesse Powell. “It’s a fantastic first step toward completing Series B, which will ultimately enable us to scale our business worldwide.” Kraken has already raised $5 million in a Series A financing in March 2014.
“We knew that we wanted to invest in Bitcoin and the Blockchain. We wanted a company that would be a wise strategic investment,” SBI Holdings Chief Executive Officer Yoshitaka Kitao said in a statement. “Kraken has been a leading global Bitcoin exchange for years. They have grown tremendously during that time while building a strong reputation as one of the most innovative, secure, compliant, and reliable companies in this emerging financial services area. Kraken was the clear choice.”