Mitsubishi UFJ Trust and Banking is working out a scheme to protect cruptocurrency holders should the exchanges they use fail, Nikkei Asian Review reported.
The company will thus be the first in the world to offer a way to keep exchange customers' cryptocurrency holdings separate from the entrusting exchange's assets.
The service is expected to be launched in April once Japan's Financial Services Agency recognizes cryptocurrencies as an asset that can be placed in trust, like real estate or securities. It will be available only for Bitcoin (EXANTE: Bitcoin) at first.
“Using an arrangement like Mitsubishi UFJ Trust's would entail a fee. But customers will feel peace of mind knowing that a trust bank is managing their assets," said CEO Noriyuki Hirosue of Tokyo-based exchange Bitbank.
Cryptocurrency exchanges log users' reported transactions, which add to or reduce holdings. Mitsubishi UFJ Trust will maintain the same records as its exchange clients. The records will be used to guarantee the safety of holders' Bitcoins in case the the exchange operators fail or engage in wrongdoing that subjects customers to losses.
Mitsubishi UFJ Trust will monitor the accounts of those who do for suspicious activity and examine pending transactions in detail as needed. To use the service, exchange customers will opt in when they start trading.