Japan’s largest bank is hopping onto the cryptocurrency bandwagon.

According to reports, Mitsubishi UFJ Financial Group Inc. (MTU) is planning to release its own coin by March 2018. The MUFG coin will have parity with the Japanese yen and will be rolled out to employees of the financial services group first. It will enable standard transactions, such as shopping or transfer of money between individuals (for example, splitting of a bill after a meal or drinks), at much lower costs as compared to credit cards.

Users will have to create wallets in order to use the cryptocurrency, and MUFG will handle processing of the transactions internally. Mitsubishi UFJ Financial conducted tests to roll out the coin in 2016 and tied up with cryptocurrency exchange GDAX, run by Coinbase, last year.    

Banks, which were reluctant to embrace cryptocurrencies, have increasingly moved towards developing their own coins or adopting the underlying technology to streamline operations. For example, six banks, including MUFG, joined UBS Bank’s Utility Settlement Coin (USC) consortium last year. The coin is interchangeable at parity with a basket of currencies and is expected to be released in a limited manner by the end of 2018.  

MUFG’s move is an expected development of the Japanese government’s push to introduce cryptocurrencies, which were legalized in 2017, into mainstream society. (See also: Bitcoin Gets Boost From Japan.) According to reports last year, Mizuho Financial Group is leading a consortium of banks to develop a cryptocurrency, known as J-coin, in time for the Tokyo Olympics in 2020.

Japanese investors and exchanges have played a major role in pushing cryptocurrency valuations to new highs. Along with South Korea, Japan accounts for a majority of trading volumes in prominent cryptocurrencies, such as bitcoin and ethereum.

Banking consortiums from the two countries are also collaborating to test money transfer using blockchain technology from Ripple. (See also: China, Japan Behind Recent Cryptocurrency Spike.)

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