On January 14, 2018, it was reported in the Japanese media that, MUFG (Mitsubishi UFJ Financial Group), which people might say is the J.P. Morgan Chase & Co. of Japan, is planning to issue its own crypto currency.
The name of the currency is planned to become "MUFG Coin".
MUFG Coin will be supported by the blockchain technology. Although the decentralized ledger technology will be used, unlike Bitcoin, MUFG Coin will be managed by MUFG.
The plan is to issue MUFG Coin within 2018. The exchange rate of MUFG Coin to JPY will be floated. However, MUFG plans to control the price of 1 MUFG Coin towards JPY 1. In order to do this exchange rate MUFG plans to open its own crypto currency exchange. MUFG has already notified the Japan Financial Services Agency (JFSA) of their plan. Under the Payment Services Act, MUFG will be required to apply for a registration to engage in the business of crypto currency exchange, so it is understandable that they notified the JFSA.
The ultimate goal for MUFG is described as to reduce costs and improve customer experience. MUFG will develop an application (apps) that the users can download and use on their smart phones. That application will allow the users to exchange JPY funds in their bank accounts to MUFG Coins and transfer such coins to their friends and use for payments in retail stores.
Apart from that the details on how to use MUFG Coin are yet to come. MUFG will hold a business idea competition in March 2018 to promote actual business ideas using the MUFG Coin.
The news report says that there is a regulatory reason for MUFG not "pegging" the MUFG Coin price to JPY. The transfer of funds using MUFG Coin may be deemed as a regulated "JPY Funds Transfer Service" if the coin price is pegged to JPY amounts. Because in such case the substance is just transferring JPY not transferring the crypto currency of MUFG Coin.
In light of such risk, MUFG seems to have considered obtaining a registration for engaging in such service. However, the upper limit of the funds to be transferred under such registration is JPY 1 million (approx. USD 10,000). This is way too low to offer this service to corporates. Accordingly, MUFG is trying to avoid such upper limit by floating the MUFG Coin / JPY exchange rate and claiming that the transfers of MUFG Coin is not a transfer JPY funds.
The Japanese financial institutions have been proactive in adopting new technology into their business. This is the first time that a concrete idea has been reported and I am very excited to see this type of development happening in Japan. MUFG is known to be a prestigious but a very conservative bank, and to see MUFG take the first move among the big financial institution is a surprise. The others, e.g., Mizuho, SMBC, may follow MUFG's move and if they do and issue Mizuho Coins and SMBC Coins, the need for Inter Ledger Protocol (ILP) may increase since people use different banks to repost there savings for daily spending.
Actually, MHFG (Mizuho Financial Group) announced that they will issue their crypto currency "J Coin". MHFG's goal is to have "J Coin" publicly used by the 2020 Tokyo Olympics games.
Here you can find a link to the original report posted on the internet (sorry only in Japanese).
https://mainichi.jp/articles/20180114/k00/00m/020/098000c
https://headlines.yahoo.co.jp/article?a=20180113-00000005-nikkeisty-bus_all