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IPFS News Link • Business/ Commerce

Mitsubishi UFJ, Japan's largest financial group is experimenting with blockchain


One of the world's largest financial groups, Mitsubishi UFJ Financial Group Inc., (MUFG) is working on its own digital currency in Japan, using blockchain technology. An MUFG spokesperson confirmed to BraveNewCoin that the program exists but the details have yet to be finalized.

The news first surfaced last week when one of Japan's leading newspaper, the Asahi Shimbun, reported detailed information about how "The "MUFG coin" is expected to be available in autumn 2017 as part of the megabank's 'FinTech' financial services that use information technology."

According to Asahi Shimbun, the MUFG coin system will function like prepaid electronic money cards, much like 'Suica,' a rechargeable, contactless smart card used as a fare card on train lines in Japan. Launched in November 2001 as a way to pay for travel, Suica can be used at approximately 4,400 railway stations and 24,000 bus services nationwide, according to East Japan Railway Company (JR East) which issues Suica. JR East then launched the electronic money card upgrade in March 2004 allowing for payments to merchants across the country. As of March 2015, 50.7 million Suica cards have been issued.

JRW 381 yakumo color cropped

"Suica was usable at approximately 290,000 stores, and record daily transactions for public transportation electronic money reached approximately 4.64 million as of March 31, 2015."

-  East Japan Railway Company

BraveNewCoin reached out to MUFG for confirmation of the cryptocurrency program, however, the bank has been tight-lipped on the subject. A spokesperson said that "Regarding the speculation in media reports, these reports are not based on any announcement by MUFG, and details have not been decided." Nonetheless, the bank confirmed the existence of the project.

"However, it is true that MUFG is conducting demonstration experiments on the 'Coin' within the company utilizing a block chain technology."

- MUFG Spokesperson

Meanwhile, the Asahi Shimbun's reporting carries weight. The publication claims to be Japan's leading newspaper since its foundation in 1879 with 18.2 million readers daily in Japan. The company reported having a total circulation of 7,612,337 copies, 99.4% of which are household subscriptions.

In February, the publication reported that the MUFG coin project commenced in the Fall of 2015. To enable deployment and use of the cryptocoins, the bank is reportedly developing an automatic teller machine that will allow users to withdraw the MUFG coins into their smartphones at a rate of one MUFG coin to one Yen. The machines are expected to be put into operation in spring 2018, according to the same source. Moreover, the bank plans to contract various vendors to accept MUFG coins for transactions.

According to polling by Pew Global Research, smartphones are flourishing across Japan but still have yet to reach half of the adult population, which is much older than the global average. Only 39 percent of Japanese adults have a smartphone so far, a little more than half of the U.S. total, according to Pew's 2015 research. If MUFG's cryptocoin is to be used in the way the Asahi Shimbun's source suggests, the low percentage of smartphone users could be a constant problem in the way of mass adoption.   

Accuity's 2016 Bankers Almanac ranks MUFG as Japan's largest retail bank by assets. The MUFG Group was established in April 2001 by three banks; the Bank of Tokyo-Mitsubishi, Mitsubishi Trust Bank, and Nippon Trust Bank. The Group currently comprises the holding company, 224 consolidated subsidiaries, and 65 equity-method affiliates. The Group reported total assets of ¥298 trillion, or about US$2.8 trillion, as of March 2016.