Progmat and Digital Asset have signed a memorandum of understanding to develop Canton Network support for tokenized Japanese government bonds and institutional transaction settlement.
Digital Asset’s November 10 announcement describes a system linking blockchain records with the existing book-entry transfer account register. The proposed tokens, called tJGBs, are intended to preserve the bonds’ legal character and settlement finality.
Bond Token Records Must Connect With Existing Registers
The project targets programmable settlement available around the clock while maintaining the legal record used by account management institutions. It is not an announcement that Japan has replaced its government bond registry with a public token.
The partners will examine Canton node services for financial institutions and demonstrations involving bond transfers and settlement. Commercial service development remains a future stage of the collaboration.
Digital Asset identifies cross-border trading hours and collateral transactions as use cases. The proposal concerns institutional market infrastructure rather than a retail bond token already available for purchase.
Repo Working Group Moves Toward Live Verification Tests
Progmat’s October 22 interim-summary announcement documents a separate milestone in the tokenized-bond and onchain-repo work. It identifies the transition to live verification, following the earlier study phase.
The November release says the working group began in May and includes more than 68 organizations in Japan and overseas. Its planned sandbox will support tokenized bonds alongside tokenized deposits or stablecoins used for testing.
Testing covers legal, accounting, taxation, operational and technical questions. Repo transactions involve selling securities with an agreement to repurchase them; moving that activity onchain requires both the bond and payment records to work together.
The working group plans links with multiple repo and collateral platforms. Those connections are intended to let participating institutions test assumptions and refine the arrangement before practical deployment.
MUFG Demonstration Covers Bonds Digital Money And Settlement
The release also identifies a demonstration involving MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank, alongside Progmat and Digital Asset.
The partners link to MUFG’s August 13 announcement covering simultaneous delivery-versus-payment settlement of government bonds and digital money, as well as the repo transaction lifecycle.
Delivery-versus-payment connects the transfer of securities with the associated payment. In this project, the test is whether digital money and tokenized bond records can support that linked process while remaining consistent with the existing legal register.
The newly signed MOU brings those earlier studies into a broader development relationship. It does not provide a final commercial launch date, transaction volume or a list of institutions already using a production service.
The Canton work follows other institutional infrastructure projects, including OpenAssets’ expansion and Canton implementation partnership. That project concerns a separate provider and should not be counted as a participant in the Japanese repo tests.
Similarly, Formation’s planned Solana securities venue concerns equity trading rather than Japanese bond registers. The relevant common issue is connecting tokenized assets with regulated financial-market processes.
Progmat and Digital Asset say further study results, individual demonstrations and a service roadmap will be disclosed as the work progresses and discussions with the relevant authorities continue.
