MUFG to test blockchain settlement for Japanese government bond repos

Four companies within the Mitsubishi UFJ Financial Group (MUFG) are launching a proof-of-concept (PoC) to settle Japanese government bond (JGB) repo transactions using the Canton Network. The participating entities include MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities, and Mitsubishi UFJ Trust and Banking.

The initiative aims to automate the transaction lifecycle and enable 24/7 real-time intraday settlement to improve funding and capital efficiency. Rather than tokenizing the bonds themselves, the project focuses on synchronizing JGB book-entry records with blockchain technology. This includes testing delivery-versus-payment settlement by using tokenized deposits or stablecoins for the cash component to ensure both the securities and cash legs settle simultaneously.

Digital Asset will provide the tokenization framework via the Canton Network, while Progmat will assist with product design and market analysis. The project is part of the Payment Innovation Project pilot program established by Japan’s Financial Services Agency (FSA) in February 2026 to explore advanced payment technologies like blockchain and stablecoins.