Bank cryptocurrency: MUFG Bank aims for 2019 launch of digital yen
Will MUFG, the world's fourth largest bank, be the first to release its own cryptocurrency?
MUFG is the world's fourth largest bank, and rumours of it creating its own yen-pegged cryptocurrency have been circulating for a while. Today, those rumours may have moved closer to confirmation with NHK Japan reporting more concrete details.
The most significant news might be that MUFG intends to conduct large scale trials by 2019, in limited areas of Japan. These could involve as many as 100,000 MUFG bank account holders who apply to take part.
The new "MUFG Coin" will be pegged 1:1 to the Japanese yen, and the expectation is that they'll be able to use MUFG Coin to make payments at restaurants, convenient stores and other shops or to make peer-to-peer transfers.
As they do, MUFG will be checking to see that it's all working as intended and that settlements are carried out smoothly and securely. MUFG is reportedly considering a range of partnerships with different businesses to accept the currency in order to get a larger testing pool.
Functionally, it might be almost exactly like Tether, if the Tether company was a giant and well-known bank instead of a secretive and somewhat unnerving corporation.
Cryptocurrency is exceptionally popular in Japan and has been embraced in a way that has so far eluded most other countries. For a while, the Japanese yen accounted for more than half of all fiat to bitcoin conversions, and some of the largest and well-known companies in Japan are moving to create their own cryptocurrency exchanges and embrace blockchain technology in other ways.
With the MUFG coin not coming out until 2019, and only being usable in certain stores in Japan for certain customers, it probably won't be moving cryptocurrency markets in any particular direction. But it does potentially signify wider adoption and acceptance of cryptocurrency and could serve as an effective model and proof of concept for other institutions to follow.
Digital currency is simply much more efficient than fiat in almost every way, so there could be a lot to like. MUFG might not be the first to get there though. There are also rumours of central bank cryptocurrencies in the works behind the scenes elsewhere.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
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