[2017-12-27] Japan’s Biggest Fin. House MUFG Prepares to Secure Bitcoin Adopters

[moriskarlov]

Japan’s largest financial group, MUFG, is preparing a service that will secure bitcoin adopters’ holdings against any failure or losses suffered by the cryptocurrency exchanges they use.

In what could be the first trust service of its kind anywhere in the world, the Mitsubishi UFJ Trust is preparing to offer bitcoin holders a service wherein their bitcoins are placed in a trust, separate from their cryptocurrency exchange’s assets. Japan has emerged among the world’s largest bitcoin trading markets despite the seismic collapse of Mt Gox in 2014, once the world’s largest bitcoin exchange.

In the event of any failure, mishandling or wrongdoing by the exchange’s operator, the security of holders’ bitcoins will be guaranteed by the trust bank. Mitsubishi UFJ Trust, a member of the Mitsubishi UFJ Financial Group, has already applied for the relevant patent protection, the Nikkei reports.

Bitcoin traders will need to opt-in for the service while trading at exchanges, allowing Mitsubishi UFJ Trust to monitor their accounts. The trust bank will reportedly flag suspicious activity and examine pending transactions. “A late-night sale of a huge amount of bitcoins, for instance, would get flagged for inspection instead of being processed immediately,” an excerpt from the report explains.

Mitsubishi UFJ trust will maintain logs of users’ transactions that used to guarantee will be ‘used to guarantee the safety of holders’ bitcoins’ in the event of any operator-based incident leading to losses. However, holders will not be secured from losses against price volatility.

While the service will entail a fee for users signing up with the financial giant, “customers will feel peace of mind knowing that a trust bank is managing their assets,” explained Noriyuki Hirosue, CEO of Tokyo-based bitcoin exchange.

The trust bank’s service will only be available to bitcoin traders at launch, tentatively in April 2018. Notably, the asset management service will only take shape after Japan’s Financial Services Agency – the country’s financial regulator and watchdog – recognizes cryptocurrencies as an asset akin to real estate or securities that can be placed in a trust.

https://www.ccn.com/japans-biggest-financial-house-mufg-prepares-secure-bitcoin-adopters/

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[1Referee]

If I look into this a bit further, it may seem like a fantastic initiative, but why not just give people the incentive they really need to store their coins offline? If the exchange in question goes down as desribed in this article for example purposes, people will have all their coins under their own control. If people leave their coins on-exchange, and the exchange goes down for whatever reason, this trust bank will first figure out what to do. Investigation can take months and months, and thus will only result in frustrated people waiting for their coins to get released. And btw, how can anyone feel peace of mind when a third party is taking care of your precious coins? They act like they do people a favor, while in reality it means more corporations will have something to say about your coins.

[BitHodler]

How can you separate articles from the mainstream media from those of actual crypto news sites? Right, the throwback to MtGox's collapse. It has no actual relevance to this announcement, but yet it's present......

Other than that, as above user pointed at, this is something that stimulates centralization even further instead of decentralization. People should understand the importance of not depending on central parties.

I am glad that decentralized exchanges have improved quite a bit, with as result more actual usage/volume. If we have lightning network enabled, it will lift things to the next level with atomic swaps.