Need proof that the international cryptocurrency market is booming? Here you go — Mitsubishi UFJ Financial Group (MUFG), Japan’s biggest bank and the world’s fourth largest, plans to launch its own cryptocurrency by March.
Japanese news site Mainichi.jp announced the news in mid-January, reporting that the cryptocurrency will be called MUFG Coin, and the bank also plans to create a cryptocurrency exchange. MUFG will process all transactions and will require users to create wallets to take advantage of its new coin.
MUFG will be the first Japanese bank to release a proprietary cryptocurrency. The bank aims to facilitate peer-to-peer transactions, simplify payment procedures, and reduce fees. Since Bitcoin has been surging in popularity in Japan, it makes sense that MUFG would want to break into the market.
The bank has stated it will set the value of one MUFG Coin to approximately that of one Japanese yen. However, the value won’t be fixed,allowing larger transfers to take place via the blockchain and to aid in decentralization.
MUFG isn’t the first bank to create its own cryptocurrency, but it’s certainly one of the biggest. The move is part of a trend by banking corporations to break into the cryptocurrency market. Some banks have had such plans as far back as 2014, when Swiss bank UBS announced plans for blockchain implementation.
In recent years, Japan has been one of the most cryptocurrency-friendly countries in the world. The country officially recognizes 11 cryptocurrency exchange operators and made Bitcoin a legal currency in April 2017. While countries like South Korea and China haven’t been so kind to cryptocurrency, Japan has welcomed it.
Japan is currently the world’s largest Bitcoin market, making up a whopping 61 percent of all global trades. (For reference, that’s twice as big as the US market.) MUFG hopes to give this rapidly growing market a new option for buying and trading.
The fact that more banks are now creating their own cryptocurrencies presents both benefits and challenges to users. While larger cryptocurrencies created by banks would be more widely available and anonymous (relatively, at least), they would also require stricter regulation. Adoption by banks could also revolutionize banking at large by leveraging blockchain methodology on a larger scale.
On the other hand, many banks fear and criticize cryptocurrency, and this prevents blockchain technology from becoming more accessible. Banks that do want to experiment with cryptocurrency often decide to create their own rather than deal directly with existing currencies. This disadvantages users who are already using one of the many popular cryptocurrency but creates new avenues for people to safely pay and trade.
One thing is for sure — as more and more banks are taking part in the cryptocurrency market, there will need to be a harmonious balance of control and decentralization. It won’t be surprising if more banks around the world announce their own cryptocurrencies or blockchain implementation, following in the footsteps of MUFG and UBS. How the MUFG Coin will fare will give insight into what the future of cryptocurrency could look like, so it’s well worth keeping an eye on.
Hi! My name is Nick Lombardi, and I’m a founder at Blockstreet.io, a non-profit, open-source blockchain news, price, and education site. If you are interested in learning more about Cryptocurrency & Blockchain technology, checkout out our education section where we explain complex topics in a simple way for a non-technical audience.