Amidst Spike in Bitcoin Price, Japan’s Largest Bank Tests Blockchain-Based Coin
The largest bank in Japan has confirmed that it is testing its digital currency using the Blockchain technology.
The largest bank in Japan, Bank of Tokyo-Mitsubishi UFJ, or MUFG, has confirmed it is testing its digital currency using the Blockchain technology.
This fact gives credence to the evolutionary potential of fully integrating cryptocurrencies into the existing banking system.
"Regarding the speculation (in) media reports, these reports are not based on any announcement by MUFG, and the details have not been decided," the bank's spokesman said in an emailed statement to Reuters.
"However we can only say that it's true that MUFG is conducting demonstration experiments on the 'Coin' within the company utilizing a block chain technology."
Barclays, Santander use Blockchain
There have been calls for banks to embrace digital currencies and many financial institutions have been engaging in research to understand the Blockchain technology.
Barclays became the first big British bank to form a partnership with a digital currency firm, social payments app Circle, which runs partly on Bitcoin's blockchain network, as it launched in the UK in April.
Santander is the first British bank to start using the Blockchain technology for recording international payments with plans to roll out the service to customers next year. However, none has openly admitted to have reached MUFG’s confirmed stage.
Setting the pace for other banks
The confirmation, which could lead other banks to make an inroad into a daring experimentation with digital currencies, is coming at a point when the price of the most popular digital currency Bitcoin has risen to a two-year high of about $700 which has been attributed to the fall of the Chinese Yuan, pending halving and increased interest from various parts of the world.
When realized by next year, according to a report by a prominent Japanese newspaper, The Asahi Shimbun, MUFG coin would be the first bank-issued virtual currency though with low commissions charged when converted or exchanged to fiat currency online.
Its system will work like prepaid electronic money and users will be able to remit MUFG coins to others through the internet at a low commission or be withdrawn through automatic teller machines which are scheduled to be rolled out by spring 2018 onto their phones.
The conversion rate of one unit of MUFG coin will be equal to one yen, the report revealed.
Aside that Japan is one of the top Bitcoin and other cryptocurrencies-friendly countries with Bitcoin trading having exceeded the US to occupy the second place after China, the overall success of MUFG coin will push a new agenda for most banks especially those with wide international networks.