Japan’s biggest financial conglomerate, Mitsubishi UFJ Financial Group (MUFG), will abandon its three-year-old blockchain payment project to focus on other digital and fintech initiatives.
MUFG officially announced Tuesday the suspension of Global Open Network (GO-Net) Japan, a blockchain-based project aiming at high scalability and multi-connectivity data processing “in response to the rise of the internet of things.”
The project was officially introduced back in February 2019, with MUFG joining forces with the United States content delivery network Akamai, planning to create a payment service featuring multiple functions like communication and “management of value through blockchain.” The initiative was first announced in May 2018.
According to the latest announcement, MUFG will suspend the GO-Net Japan project due to “slow growth of payment transaction numbers caused by the impact of the COVID-19” and other factors that made it hard to develop on the scale originally expected.
“As a result, the business is not expected to be able to achieve profitability in a reasonable timeframe, and it was concluded that it would be desirable to suspend its operations,” the MUFG said. The company does not expect that the closure will have any material effect on MUFG’s financial results for the current fiscal year, the announcement notes.
In the meantime, MUFG will continue to accelerate digital transformation as its core strategy in order to become a “leading business partner that pioneers the future with financial and digital capabilities.” The company also said that it continues discussing further opportunities of collaboration with Akamai to utilize the “latest technologies based on experience from the GO-NET project.”
As previously reported by Cointelegraph, MUFG has also been working for years on a platform for managing security tokens, developed by MUFG’s ST Research Consortium. Established in 2019, the project rebranded to the Progmat Coin project in February 2022, aiming to provide a platform for the issuance and management of stablecoins.