Digital currency MUFG coin will be available for practical use from the last half of this year, MUFG Bank's parent company Mitsubishi UFJ Financial Group Inc. (MUFG) decided.

The megabank has been working to complete the service to compete with the growing number of IT firms creating smartphone apps for making digital payments.

MUFG officials said they had made significant progress in developing the digital currency since trials started in 2017.

MUFG's coin system uses “blockchain” technology that eliminates the need for large computers to maintain data records, reducing operating costs.

This enables the company to offer users low commission charges for various financial transactions.

Kanetsugu Mike, who became MUFG's president on April 1, told The Asahi Shimbun he hopes the firm's digital currency and other new services will provide customers with "new values which have never been seen before.”

With a smartphone app, users can withdraw money from their bank account, which is converted into MUFG coins at a rate of one MUFG coin to 1 yen.

MUFG fixed the rate to prevent large fluctuations that are commonly found in cryptocurrencies using blockchain.

Users can exchange coins with one another, which could come in handy in situations such as when settling a bill shared by a group since one person can pay all the bill first and collect the amount through coins from friends.

The coins can also be used for purchases at affiliated stores, and the stores' privilege points can be received by coins.

Blockchain technology enables affiliated stores to ensure privacy while collecting user data necessary to provide customers with various services, MUFG officials said.

One service being considered to thin crowds on buses during rush hour is to award coins to people who travel outside peak periods, which can be used as a bus fare.