The Strategist

Japan’s largest bank to secure Bitcoin exchanges against collapse

12/28/2017 - 10:12

Mitsubishi UFJ Trust and Banking filed a patent application for registration of a system for safe storage of users of crypto-currency exchanges in an attempt to protect customers from incidents such as bankruptcy of the Japanese stock exchange Mt Gox.

yo & via flickr
yo & via flickr
Mt Gox exchange, the bankruptcy of which became one of the most significant incidents in the history of the crypto-currency operations, was registered in Japan. Mitsubishi UFJ Trust promises to protect exchange users from similar happening in the future, writes Nikkei Asian Review.

The bank will store the crypto-currency assets of its customers separately from the assets that they use directly for trading on exchanges. Initially, users will be able to deposit only Bitcoins. The service is expected to be launched in April next year, when the Financial Services Agency of Japan recognizes crypto currency as an asset suitable for confidential storage.

Crypto-currencies exchanges keep a log of transactions of their users. They use the information to credit or debit funds from their accounts. Mitsubishi UFJ Trust will keep the same log for its customers. The journal will guarantee safe storage of assets.

Customers will pay a commission for keeping their assets. In exchange, according to Tokyo-based Bitik stock exchange’s CEO Noriyuki Hirosue, they "will feel peace of mind knowing that their assets are managed by a bank."

Traders must register before bidding to use the service. After that, Mitsubishi UFJ Trust will monitor their accounts and identify suspicious transactions. For example, a deal on the sale of a large volume of Bitcoins, committed late at night, can be considered questionable and will be processed only after passing an additional check.

Previously, Mitsubishi UFJ Financial Group reported its intention to issue its own digital currency, which would allow the bank to collect more data about the behavior and preferences of customers.

The Bitcoin rate rose to $ 17,000 this Wednesday, thus updating the local maximum after the correction began. Now the rate of the first crypto currency is about  $ 16,190, capitalization is $ 271 billion.

Analyst John McAfee gives optimistic forecasts of short-term and medium-term prospects of Bitcoin, given its latest leap and price growth in 2017 as a whole.

"As I said, Bitcoin is recovering and rising rapidly after Christmas. At the moment, Bitcoin remains the best long-term crypto-investment, and I confirm my forecast: $ 1 million by the end of 2020," McAfee wrote.