Japan’s Mitsubishi UFJ Financial Group (MUFG) has revealed that it will finally be putting its digital currency MUFG coin to practical use this year. The token will run on the bank’s own blockchain, a result of years of effort to introduce the benefits of blockchain to payments systems.
The token, which was first conceptualized in 2016 and experienced development in 2017, is intended for digital payments in the retail space. Users can convert their fiat funds into digital tokens which can then be used for payments at member stores, or for exchange with other users.
The token was created with the intention of reducing fees in transfers, and for use in the remittance space. Demonstrations and practical tests soon followed. The bank participated in a pilot program that put a syndicated loan of $150 million on the blockchain. UFG is expected to be implemented in the second half of 2019.
The MUFG token is a stablecoin that is fixed to the Japanese Yen on a 1:1 basis. Stablecoins are a particularly interesting niche in the cryptocurrency market and several have been launched or are being prepared for launch this year. Earlier this year IBM and Stellar announced that would partner with the intention of helping 6 banks release their own stablecoins.
The bank has previously described the initiative as follows,
Potentially this coin could have large-scale commercial potential, as well serving small-scale retail bank customers. Other than Mufg coin, Mufg is testing another untitled digital currency rewards [program] for employees who reduce their overtime hours and practice a healthy lifestyle.
Local reports also stress that the technology allows merchants to receive data about customers without impinging on privacy, which can then be used for various services.
MUFG is Japan’s largest bank and their intentions with digital assets underscores how forward-thinking the nation is when it comes to cryptoassets. Japan’s SBI Holdings, which backs Ripple’s XRP, hopes to see all banks use the XRP token by 2025. Meanwhile, JPMorgan Chase has also released their own JPM Coin, and the World Economic Forum reports that over 40 central banks across the world are looking into blockchain and cryptocurrencies.