Leading Japanese trading company to issue gold-linked cryptocurrency
Mitsui & Co., one of Japan's top general trading houses, plans to launch a cryptocurrency pegged to gold in yen's value. Retail investors will be able to purchase the coin through cryptocurrency exchanges and the value of the coin will be linked to gold prices as Nikkei asia reported.
In addition to other digital payment systems that are becoming increasingly popular in the country, ZipangCoin (ZPG) will allow users to buy items through affiliated retailers through a smartphone app. Japan's first cryptocurrency, which will be backed by gold, will be less volatile than Bitcoin and other cryptocurrencies backed by virtual assets.
Japan's financial regulatory agency (FSA) has granted permission to Mitsui for its cryptocurrency exchange with Seven Bank and other companies. The exchange is registered with the Kanto Local Finance Bureau.
Sumitomo Mitsui Banking will back each ZPG with one gram of gold, so each ZPG's value will be equivalent to one gram of gold. Gold procured from the London Metal Exchange by Mitsui will be linked to ZPG at yen-denominated prices.
In the future, Mitsui plans to enable the use of ZPG for payments. Users will, for example, be able to use apps on their smartphones to buy items at supermarkets and convenience stores. Japanese authorities are just beginning to warm to the idea of issuing their own digital currency. However, the new steps Japan is taking toward cryptocurrencies are encouraging. The report revealed that user identification will be required for exchanges registered with the FSA to trade ZPG.
Nikkei Asia reports that the coin will be built on a private blockchain, in contrast to cryptocurrencies like bitcoin and ether. Private blockchains can restrict who accesses the network.
Moreover, Sumitomo Mitsui Banking is a member of a consortium of nearly 70 Japanese banks and industry players that are looking at the possibility of issuing a digital yen backed by bank deposits.
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