Japan’s Largest Bank Plans to Establish Cryptocurrency Exchange
The move marks the first time a Japanese Bank will launch a cryptocurrency and exchange. Worth more than financial mega-giant Bank of America, Mitsubishi UFJ Financial Group is currently one of the top ten banks in the world at a value of $2.32 trillion. According to a direct translation from one of Japan’s leading newspapers, “by controlling the exchanges themselves, we suppress fluctuations in the price of coins so that they can be used for settlement and remittance stably.”
Mass adoption of a virtual currency to be used for everyday payments is the ultimate goal of the project. Users will be required to download certain applications on their smartphones that will permit token transactions at partnered business venues. Due to blockchain’s technological capabilities, it is said to drastically reduce traditional bank card fees and deliver near-instant payments.
According to the report, the problem with the current crypto market is the lack of management surrounding cryptocurrencies like Bitcoin, making pump and dump schemes routine. To help stabilize prices, MUFG will launch its own virtual currency on the exchange called the “MUFG Coin”. From what it seems, each coin is set to be valued around 1 Yen, with transactions on the exchange to only be between users themselves and MUFG.
The strategy behind the coin and exchange is certainly creative and a win-win scenario for MUFG. With the MUFG coin not being directly fixed to the Yen, it is able to bypass laws that limit transactions of 1 million Yen or greater without banking being involved. If it were to be issued like other virtual currencies (which are considered legal currency in Japan) that aren’t price controlled, the limit would not apply, but the price would not be able to be somewhat fixed and scare away potential users due to volatility.
While MUFG has made contact with the Financial Services Agency in order to legalize the endeavor, this is not Japan’s first company to see the benefits of cryptocurrency. Back in December, Japanese based computer network firm GMO Group unveiled its plan to offer its roughly 4,000 employees to receive a fraction of their earnings in Bitcoin.
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