The bank’s home-grown digital currency will be pegged 1:1 to the Japanese yen.

Despite innumerable delays, a yen-backed stablecoin from the stable of Japanese banking giant Mitsubishi UFJ Financial Group (NYSE: MUFG) will likely see the light of day by late 2020. CEO Hironori Kamezawa broke the news at an interview with the Mainichi Shimbun newspaper. The token, dubbed “MUFG coin,” for now, could be used by anyone in the country. (CryptoNews)

Partnership with Recruit

Jobs and HR platform Recruit and MUFG tied up to launch the new blockchain-based token and a smartphone-based payment system in December 2019. Recruit and MUFG have [51:49] holdings respectively in the JV formed for this purpose.

MUFG is the world’s fifth-largest bank and is keen to replace the extensive use of cash in Japan with a digital alternative. Four out of five Japanese shoppers still use cash. Recruit is the owner of the restaurant booking site Hot Pepper Gourmet.

The digital currency project will likely get a fillip following the virus outbreak because people now prefer contactless payments and try to avoid having to deal with possibly contaminated currency notes.

The MUFG coin token will be a stablecoin that will have a 1:1 exchange peg with the Japanese Yen. According to MUFG, over a million Recruit-affiliated merchants are primed to accept the token. Kamezawa said even non-affiliated stores would be able to participate, however.

MUFG coin already has a rival

Last year, Mizuho Bank (NYSE: MFG) launched its J-Coin app after it signed up nearly 60 financial institutions to its banking digital currency platform, according to Ledger Insights.

The J-Coin smartphone app, which is not based on the blockchain, currently boasts of participation by 85 Japanese banks.

MUFG focused on digitization

Earlier this year MUFG made a $700 million investment in Grab, one of the largest fintech apps used by millions of users to hail rides, order food and make payments.

Mitsubishi and Grab plan to collaborate on a “super-app” that will leverage Grab’s customer data and Mitsubishi’s financial muscle. It will enable the banking giant to offer loans, insurance, and other daily services.

Speaking to Bloomberg, Kamezawa said Monday: “The digital shift has already been one of the megatrends in society, but it has picked up pace in the wake of the pandemic.”

He added that the bank was looking for more acquisition opportunities like Grab, rather than traditional, branch-centric South Asian banks.

Related Story: Singapore’s Grab To Get $700M Investment From Mitsubishi UFG-Reports