MUFG: Fourth-largest bank to make own cryptocurrency and exchange
Meet the Yen Tether.
MUFG (Mitsubishi-Tokyo UFJ), the world's fourth largest bank, plans to launch its own cryptocurrency, exchange and wallet system in 2018, according to Bitcoin News. The new cryptocurrency will be pegged to the Japanese yet.
Most of these would represent world firsts from such a large financial institution. The creation of the new currency might serve as a more serious test case for national cryptocurrencies than the recently announced Venezuelan petro-dollar cryptocurrency.
Japan Yen Tether and MUFG Exchange
The MUFG coin doesn't have an official name yet, but it's looking like a rough equivalent to USDT, the US Dollar Tether used by some exchanges to digitise their fiat currency reserves for blockchain usage.
The new coin is being envisioned as a digital asset pegged to the price of the yen to make stable transactions around Japan and for use as a real-world cryptocurrency. It will also be used on the MUFG exchange and will probably see quick uptake on other exchanges around the world once it starts being traded.
The practical use of this stability has been on display recently, with the USDT actually making gains and rising above a dollar amid the current market dip. This might be the result of traders converting their funds to a stable fiat-pegged cryptocurrency in order to sidestep lost value of other currencies.
But the MUFG Yen Tether would potentially be very different in that it's backed by an enormous financial institution. The bank also has plans to launch its own cryptocurrency exchange, which seems likely to deal mostly with the MUFG coin and bitcoin initially.
Bitcoin managed accounts
MUFJ Trust is also working on a plan to further bridge the gap between fiat and crypto, with a segregated bitcoin account.
This account will keep its clients' holdings in accounts linked to exchanges, but without actually sending the money there. This could protect funds against loss in the event of breaches or other failures at the exchange itself. It also comes with other bank-like services, such as account flagging in the event of suspicious activity and other protections for customers.
According to the patent application, this is the first type of trust arrangement for cryptocurrency. It's expected to come with fees, but some customers might appreciate the peace of mind that comes from the support of a well-established bank if they venture into cryptocurrencies.
This system is due for release as soon as the JFSA (Japan Financial Services Authority) recognises bitcoin as an asset that can be held in a trust.
These announcements might be good news for bitcoin, whose market share has been flagging under the weight of stiff competition from newer cryptocurrencies.
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