Bank of Tokyo-Mitsubishi UFJ Ltd. will become the world’s first major bank to issue a virtual currency, which will feature low commissions for online exchanges or conversion into foreign currencies, sources said June 9.

The “MUFG coin” is expected to be available in autumn 2017 as part of the megabank’s “FinTech” financial services that use information technology.

MUFG is an abbreviation of Mitsubishi UFJ Financial Group Inc., the parent company of the bank.

Under the planned system, users can withdraw money from their bank accounts into an app on their smartphones. The money will be converted into MUFG coins at a rate of one MUFG coin to 1 yen.

The MUFG coin system will work much like prepaid electronic money, such as “Suica,” already widely used in Japan. However, users will be able to remit MUFG coins to others through the Internet at a low commission.

The MUFG coins will make it easier, for example, for customers to equally share a bill after drinking or dining parties, the sources said.

Users can also exchange MUFG coins with foreign currencies at airports at much lower commission rates than those currently available, they said.

The full-fledged participation and the high creditworthiness of the megabank should help to spread the use of virtual currencies among the public, the sources said.

The bank is also developing an automatic teller machine that will allow users to withdraw the MUFG coins into their smartphones. The ATM, expected to be put into operation in spring 2018, will also enable users to change MUFG coins into cash.

In addition, the bank plans to conclude contracts with various stores to accept MUFG coins for transactions.

The “blockchain” technology used for another virtual currency, bitcoin, will also record MUFG coin transactions.

Blockchain does away with the need for large computer to maintain data records, which will bring down the costs to operate the MUFG coin system, the sources said.