MUFG Group has announced plans for a proof of concept (PoC) to bring Japanese government bond (JGB) repo transactions onchain using the Canton Network, targeting improvements in intraday settlement and funding efficiency. Initially it will execute transactions among group entities including MUFG Morgan Stanley Securities and Mitsubishi UFJ Trust and Banking, alongside technology partners Progmat, the leading tokenization platform in Japan founded by MUFG, and Digital Asset. It also envisions working with external market participants. No timeline was shared.
The PoC has two tracks. The first focuses on onchain delivery versus payment (DvP) settlement of JGBs using digital money. The second is more ambitious, aiming to automate the full repo transaction lifecycle using the lending protocol developed by Switzerland-based Secured Finance. Secured Finance has worked with tokenized securities platform DigiFT on collateral utilization infrastructure for uMINT, a tokenized money market fund issued by UBS. It joined Progmat’s JGB repo working group in May.
The tokenized bonds are essentially digital twins of the underlying JGBs. The conventional book entry transfer account registers would be synchronized with blockchain state changes, preserving compliance with existing securities laws while enabling onchain settlement.
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