Japan’s largest banking group, Mitsubishi UFJ Trust and Banking Corporation (MUFG) announced a major deal with NTT Data to develop the Japanese digital corporate bond market. MUFG launched the blockchain tokenization infrastructure Progmat and NTT Data owns Japan Information Processing (JIP) which operates Japan’s largest bond issuance and payment agent solution. JIP’s bond offering is used by 95% of JASDEC (Japan’s Securities Depository) agents.
Blockchain is expected to cut the costs of bond issuance and servicing as well as make it easier to use bonds for collateral in other transactions. Lower costs mean smaller bond issuances become viable and it also supports fractionalization or smaller denominations, broadening the investor pool.
As context, Japan is one of the most active tokenization jurisdictions for major financial institutions launching digital assets. MUFG estimates there have been Yen 96 billion ($670m) in issuances so far, with Progmat as the most popular platform. However, to date, most security tokens are for tokenized real estate.
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