The Largest Bank in Japan Plans to Launch Virtual Currency Exchange
Reports indicate the Biggest Bank in Japan will Launch Cryptocurrency Exchange
The report of the launch of this cryptocoin exchange came from Mainichi Shimbun, one of the country’s major newspapers. Another report also appeared in KBS, the national news publication of South Korea. It claims that MUFG already has a team of developers in place. These developers will work on the creation of the exchange, which will target the Japanese crypto market.
Japan Is Welcoming Crypto exchanges
In September 2017, the Japanese government introduced a licensing program to regulate virtual currency exchanges in the country. This would allow them to operate like proper financial institutions. Thus far, 11 exchanges have already been given licenses and the status of regulated financial services provider. In September of 2017, a further 17 exchanges were undergoing review. Since then, more exchanges have received approval to operate in the country.
In the coming weeks, the bank plans to gather the talent and resources needed to create a cryptocoin exchange. After that, it will file for approval with Japan’s FSA. However, Mainichi Shimbun notes that filing for an exchange approval in Japan is not easy. If it hopes to launch a trading platform for virtual currencies, it will have to undergo a rigorous process.
Two months ago, another report indicated that the second largest bank in South Korea had begun to develop a Bitcoin wallet and a vault system. This was aimed at offering security to existing crypto coin users.
A growing number of mainstream financial companies are turning to crypto markets. With the entry of regulated exchanges in Japan, it will offer traders of virtual currencies a wide range of platforms that they can use to secure their assets.
The Bank May Release a Token
Mainichi Shimbun further indicates that MUFG plans to launch a crypto token. This token will hedge its value to the price of Yen. In essence, the bank would operate a reserve of Yen. They would then produce an equal amount of MUFG tokens to match the Yen’s price.
According to local media outlets, the MUFG token would be used as a crypto asset that would protect traders from market volatility. In times of major volatility, traders can move their assets into the Yen-backed token and protect against volatility degrading their assets.
This concept by MUFG is quite similar to USDT or Tether, that hedges its value to the US dollar. However, USDT has been controversial in the virtual currency world since there is no third party audit allowed. To avoid the same situation, MUFG would need to allow a third party audit to be conducted.
The exact time for the launch of this exchange and token is not known. However, it is encouraging that Japanese banks, and the major ones at that, are launching virtual currency exchanges.
What do you think about the launch of an exchange by a large Japanese bank? Leave us your thoughts in the comments section below.