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Mitsubishi UFJ Trust & Banking to offer trustee service for bitcoin holders

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Mitsubishi UFJ Trust & Banking to offer trustee service for bitcoin holders

Mitsubishi UFJ Trust & Banking Corp. plans to launch a new scheme that will protect cryptocurrency holders in case the exchange that they use fails, The Nikkei reported.

A first of its kind in the world, the bank will offer an option to separate investors' cryptocurrencies from an exchange's assets. The bank plans to launch the scheme for bitcoins as early as April 2018, once Japan's Financial Services Agency recognizes virtual currencies as assets that can be placed in trust, similar to real estate or securities, the publication reported.

Through the proposed scheme, Mitsubishi UFJ Trust & Banking will keep a records of investors' bitcoin transactions similar to the one that an exchange keeps. The records will be used to guarantee the safety of investors' bitcoins in case the exchange fails or is involved in wrongdoing that could result in customer losses.

The bank will also be able to monitor accounts for suspicious activities, and may investigate transactions if needed.

The scheme, however, will not protect users against losses associated with volatility in trading.

The bank has recently applied to patent the scheme.

Japan is one of the biggest players in the cyptocurrency world, accounting for around 40% of global bitcoin trading, The Nikkei said.