Japan’s MUFG Suspends Payments Platform GO-NET

Japan’s Mitsubishi UFJ Financial Group (MUFG) is suspending operations of its blockchain-based payments platform GO-NET, citing a sluggish economy and the difficulty of commercializing the product.

MUFG announced the suspension on its website Tuesday (Feb. 22), a little less than three years since the creation of GO-NET (or Global Open Network), which was launched to provide “an open platform with high scalability and multi-connectivity data processing in response to the rise of IoT,” the bank said.

However, the slow growth of payment transactions stemming from factors such as the COVID pandemic made it tough for GO-NET to develop its business at the scale it had envisioned.

“In addition, in the IoT business, which GO-NET Japan had planned to expand in future, it struggled to find a fit to the growing market needs with its high scalability and multi-connectivity data processing blockchain, and commercialization of the product is expected to take longer than anticipated,” the bank said.

As such, GO-NET likely won’t reach profitability “in a reasonable timeframe,” leading MUFG to conclude suspension was the best course of action. From there, the plan is to liquidate GO-NET Japan and its parent, GO-NET.

MUFG says the suspension is not expected to impact its financial results for this fiscal year. The company says it will “continue to accelerate digital transformation as a core strategy” and look for further ways to collaborate with Akamai Technologies, which worked with MUFG to create GO-NET.

MUFG, which is Japan’s largest bank in terms of assets, offers commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and other financial services. The company also has the biggest overseas network of any Japanese bank, with offices and subsidiaries across 50-plus countries.

Earlier this month, MUFG said it was planning to issue a stablecoin pegged to the yen under the revised Settlements and Payment System Act due to go into effect in 2023.

Progmacoin — as the stablecoin is called — will be used for clearing and settlements of digital securities. It is designed to provide instant settlement of securities trades by using the blockchain for trading and a cryptocurrency for payment.

Read more: Japan’s Biggest Bank Plans Yen-Pegged Stablecoins