Bank of Tokyo-Mitsubishi UFJ – the banking arm of the Mitsubishi UFJ Financial Group’s (MUFG) is said to be reportedly working on an in-house digital currency and will be conducting its first large-scale in early 2019 next year. Being the largest operational bank in Japan, MUFG will be the first-of-its-kind financial institution to have its own digital currency to be used across 100,000 MUFG retail bank customers, says local Japanese publication NHK.
The MUFG Coin will be tied up to the Japanese Yen in 1:1 conversion ratio. Account holders of the bank will have to apply to take part in the trial process which will allow them to download a smartphone app and covert their fiat yen bank deposits into their ‘MUFG Coin’ holdings.
The report further goes to note that ‘They will be able to use the currency to make payments at places like restaurants, convenience stores, and other shops. They can also transfer the currency to the accounts of other participants.’
Before shifting to deploying this facility os such a huge customer base, the bank will perform initial trials among the in-house employees for over a year where they will be assessing whether the settlements and other peer-to-peer transfers done using the app are efficient and secure.
Another advantage that MUFG coins will bring to its users is the low commission fees for payments including international transactions, in comparison to the existing prepaid electronic money platforms. In a push towards expanding its global reach, the bank will also encourage users to exchange MUFG Coins with foreign currencies at the airport at low commission rates. An excerpt from the report reads: “If MUFG coin is used for overseas remittances, it is estimated that the commission will be cut to less than one-tenth of that of the current cost of several thousand yen per (international) transaction.”
Additionally, the bank is also said to be working on a two-way ATM that will allow the users to ‘withdraw’ coins on their smartphone or even exchange them into fiat yen. MUFG president Nobuyuki Hirano previously said that having an in-house digital currency in the form of MUFG Coins is an inevitability would “overcome issues of [existing] virtual currencies” like volatility “[to] create a highly useful currency”.
Moreover, according to the latest press release arriving today, May 22nd, the MUFG Bank achieved yet another milestone wherein its Thailand-based subsidiary could successfully send money in just a few seconds to the Standard Chartered account of a Singapore-based Mitsubishi Group Subsidiary, using Thai bank Krungsri’s (Bank of Ayudhya) Blockchain Interledger.
While commenting after the successful completion of this pilot, Thakorn Piyapan, head of the Krungsri Consumer Group and the Digital Banking and Innovation Division, said that the “technology-based transaction helps enhance their subsidiaries’ financial liquidity toward greater flexibility and efficiency.”
The MUFG Bank is also said to have tied-up with major U.S.-based cloud delivery platform Akamai Technologies for the release of a blockchain-based global payment network.