The launch date has been officially announced after the company entered into a partnership with nearly 60 financial institutions, which together boasts 56 million customer accounts.
Mizuho’s cryptocurrency platform will host the native currency, dubbed “J-Coin”. The platform will supposedly link the digital wallets allotted to clients with their respective bank accounts.
Mizuho Financial Group, which has total assets worth over $1.8 trillion as of Dec. 31, 2018, has mentioned that the native currency will be administered by a custom built mobile app, named J-Coin Pay, utilizing QR codes at Point-of-Sale to finish payments to vendors.
Nikkei has stated that the stable cryptocurrency will be pegged to yen on a 1:1 basis. This implies that one J-Coin has a value of $0.01. Furthermore, fund transfers between J-Coin wallets and bank accounts are allowed for free.
Commenting on the new age payment services, Tatsufumi Sakai, CEO of Mizuho, told Nikkei that “the arrival of all these new entrants [into the digital payments space] is eroding the common-sense notion that payment services are provided by financial institutions.”
Nikkei has pointed out that Japan already has unique payment services such as the one offered by e-commerce giant Rakuten and Line, the provider of chat application. Notably, Line has launched a native cryptocurrency that functions on its own blockchain.
Nikkei has also mentioned that potential J-Coin wallet users need not undergo credit checks and the service will be made available to even those who are below 18 years of age. The wallets will also be more flexible than traditional banks by offering a range of payments and remittance facilities. It will also provide the option for friends to divide bills or transfer money as a gift to family members.
To ensure adoption, Mizuho is trying to have a tie up with large retail sector players. In this regard, Mizuho is negotiating with FamilyMart, a convenience store, and Bic Camera, an electronic retailer, and East Japan Railway, a transport company. Mizuho intends to bring on board a minimum of 300,000 stores and signup a minimum of 6.5 million clients in the next few years.
Even though the big financial institution has partnered with 60 organizations, it is still miles away when compared to Line’s existing user base of 79 million. Furthermore, Line Pay is already supported at nearly 1.30 million stores.
Therefore, in order to push J-Coin Pay project forward, Mizuho has entered into a partnership with Alibaba’s Alipay. To increase adoption rate, Mizuho intends to charge vendors highly competitive transaction fees when compared to the charges levied by credit card companies. Credit card companies usually charge between 2% and 5% per transaction.
The Japanese company unveiled its cryptocurrency plans in the last leg of December 2018. Likewise, in January 2018, Mitsubishi UFJ Financial Group, another Japanese banking behemoth, the fifth largest in the world, announced its plans to introduce a stable coin which will be pegged to the yen.
At that time, Mitsubishi UFJ Financial revealed the name of the native cryptocurrency to be MUFG coin. The company also intends to launch a blockchain backed payments system, in partnership with Akamai, a US content delivery provider, in the first-half of 2020.