Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, has developed a blockchain-based payments system in partnership with US tech firm Akamai. According to the bank, the current experiments show that the system can handle 1 million transactions per second and can validate transactions in less than two seconds. MUFG expects the platform to scale in the future and reach a capability to process about 10 million transactions per second. The new service, which will operate with its own token called MUFG Coin, will be tested in 2019 with about 100,000 users. The companies hope to launch it in early 2020, an Akamai executive revealed.
MUFG Coin will act as a digital currency asset and will be backed by Japanese Yen at a 1:1 rate. Users will be able to download the coin on their smart devices and use it for online shopping, micropayments, P2P transfers, and IoT applications.
MUFG CEO and president Nobuyuki Hirano said:
“For years, the financial industry has sought to utilize blockchain to secure and hasten transaction processing, and lower associated costs.”
The new system will “support significantly greater volumes of high-speed payment transactions without compromising the level of security required to combat fraudulent transactions,” he added.
Akamai’s Chief Technology Officer, Andy Champagne, praised the new blockchain platform, saying that it was perfect for traditional online payments. He hopes it will also be used for micropayments, such as very small fees for different online services, like spending a few cents for an online article.
MUFG holds about $2.5 trillion in assets, which makes it the fifth largest bank in the world by total assets. It is also the world’s second-largest bank holding company, having over $1.8 trillion in deposits. If the group succeeds with its blockchain payments system, it will become the first large bank to issue a kind of cryptocurrency.
At the end of 2017, MUFG’s subsidiary Bank of Tokyo-Mitsubishi UFJ (BTMU) partnered with NTT Data Corporation, a branch of Nippon Telegraph and Telephone, to trial a blockchain-based proof of concept (PoC) system for the trade links between Japan and Singapore.
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