Tourists in Popular Japanese Region Could Soon Use a Local Cryptocurrency

Mitsubishi Research Institute (MRI) and an Osaka-based railway company are issuing a local cryptocurrency for use in a popular tourist area in Japan's Mie Prefecture.

The MRI, formed in 1970 by Mitsubishi Group companies, said on Wednesday that the token, dubbed Kintetsu Shimakaze Coin, will be utilizing blockchain and is available only from Nov. 11 to Jan. 31 next year.

It is the fourth such unit created by the two companies as they work to refine the technology and develop relevant processes, procedures and services.

The experiment is a highly limited trial and will take place in the Ise-Shima region, a peninsular area known for its beaches, seafood, pearl cultivation and a national park. Only 15 establishments in the region will accept the coin, including the Shima Spain Village, Miyako Resort Shima Bayside Terrace, Kashikojima Espana Cruise and the Makonde Art Museum.

While the token will be temporary just for the pilot, Kintetsu hopes to eventually issue a permanent cryptocurrency for use along its railway lines, according to a news report from Nikkei.

To use the cryptocurrency, which is a stablecoin pegged to the Japanese yen, users must download the Kintetsu Shimakaze Coin app for registration.

They will be able to top up in 1,000 yen blocks, paying a 10 percent premium, up to 100,000 yen in total. Transfers of the coin will be possible between participants. At the end of the trial period, the coin will be retired and cannot be used.

The Kintetsu Group, the local company partnering with MRI, is listed on the Tokyo Stock Exchange and owns transportation assets including lines into the targeted area of the program. MRI will be responsible for the issuing and management of the tokens.

Kintetsu and MRI have been cooperating for two years on local coins. The first Kintetsu Harukas Coin Social Experiment was run in September and October 2017 to test a payment system using blockchain technology.

The second Kintetsu Harukas Coin Social Experiment was run in October and December 2018 in Osaka to test the QR code technology and introduce person-to-person transfers. Mitsubishi UFJ, the banking group, and Omron Corporation participated. In February 2019, the two companies tested a local coin around Osaka Uehommachi Station.

Ise Bay in Mie Prefecture landscape image via Shutterstock