Japan’s largest banking group, MUFG, is preparing to issue its inaugural digital bond on 11 November 2025. The Yen 10 billion ($65.4 million) bond will be the first security token bond issued by a Japanese bank. MUFG Trust and Banking is the founder of the Progmat security token issuance platform, so it has plenty of DLT experience, though this is its first bond issuance on its own behalf. The underwriter for the bond is MUFG Morgan Stanley Securities.
MUFG intends the unsecured subordinated bond to form part of the bank’s Tier 2 capital for Basel III purposes. While the bank has seen strong demand for past bond issuances from institutional and retail investors, it wants to gauge interest amongst a broader investor group such as digital asset investors. The bank also hopes the issuance will contribute to the development of Japan’s capital markets.
The bond’s design will impact the attractiveness to crypto investors. All transfers of bonds have to be conducted via MUFG Morgan Stanley and recorded on the Progmat blockchain to be legally valid. More importantly, the bonds may not be used for collateral purposes, something that crypto investors often desire.
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