Japan’s largest bank, Mitsubishi UFJ Financial Group, is developing its own cryptocurrency and also plans to open an exchange on which it will be traded. Called MUFG Coin, the upcoming virtual currency will be pegged to the yen, with the price of one MUFG Coin kept stable at one yen, according to a report in the Japanese daily Mainichi.

MUFG, which is the fourth-largest bank in the world, has already informed Japan’s Financial Services Agency (FSA) of its intent to issue the cryptocurrency and start an exchange for its trade, both of which it wants to do in the next few months.

The new digital currency would be usable at participating stores, and also for transfer between individuals, using a smartphone app. It will also bypass Japanese laws that limit remittances to 1 million yen, since it is not considered to be money in the traditional sense of the word.

But bypassing that law would also mean the value of MUFG Coin cannot be kept fixed, so the bank will try to keep it around one yen. Having control over the exchange is an important matter for a traditional bank, so it can also have control over the price of the cryptocurrency being exchanged on it.

The bank is in talks with FSA to clear regulatory hurdles for the launch, and is also planning activities in March to exhort businesses to take up usage of its cryptocurrency, according to the Mainichi report.

Mitsubishi Bank MUFG This picture shows a board of the Japanese mega bank Mitsubishi UFJ Financial Group in Tokyo, July 31, 2017. Photo: Kazuhiro Nogi/AFP/Getty Images

MUFG has been working on MUFG Coin since early 2017, and in May, it launched an in-house trial of the coins. In a statement to investors, the bank gave its reasons for getting in on the virtual currency trend, reasons that were largely related to reduced costs for the bank and its customers, both corporate and individual.

“Although banknotes and coins can be used anywhere in their currency zone, the significant toll in terms of cost and time required for the procurement, storage and transport of these instruments is often overlooked. With an eye to bringing innovation in the field of virtual currencies, MUFG is developing a low-cost cashless finance infrastructure by leveraging blockchain technologies, with the goal of releasing ‘MUFG Coin’ — a convenient digital payment instrument that help facilitate the realization of a cashless society in Japan,” it said.