Japanese bank to pilot digital currency for in-store payments

Mitsubishi UFJ Financial Group, the world’s fifth largest bank, is to invite 100,000 customers to participate in a pilot of MUFG Coin, a blockchain-based digital currency that customers will be able to use to make mobile payments in stores. The trial is expected to begin early next year.

Mitsubishi UFJ Financial Group (MUFG) logo“The participants will install an app on their smartphones that converts their deposits into the digital currency,” NHK Japan reports. “One MUFG Coin will be worth 1 yen. They will be able to use the currency to make payments at places like restaurants, convenience stores and other shops. They can also transfer the currency to the accounts of other participants.”

Payments made using the MUFG Coin are expected to carry much lower transaction costs than standard credit card transactions, Nikkei Asian Review reported last year. “Remittance costs are kept low thanks to blockchain, the distributed ledger technology that underpins bitcoin. With MUFG Coin, wiring amounts of money too small to be practical under typical bank fees becomes possible.”