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MUFG PoC to bring Japanese government bond repo transactions onchain. MUFG's experiment plans to bring Japanese government bond repo transactions onchain to achieve 24/7 settlement, as well as improved capital and operational efficiency. Four MUFG companies plan to bring Japanese government bond repo transactions onchain using the Canton Network, as part of a new proof of concept (PoC). The four companies, including MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking and MUFG Bank, will collaborate with Digital Asset Holdings and Progmat for the PoC, according to a Thursday announcement. The companies said they seek to improve operational efficiency through automation of the transaction lifecycle, enable real-time intraday settlement 24/7, as well as enhance funding and capital efficiency. The initiative is part of the Payment Innovation Project pilot announced by Japan's Financial Services Agency in February 2026, aimed at helping fintech firms run PoCs on advanced payment technologies such as blockchain-based solutions, stablecoins, tokenization and onchain settlement. MUFG has been extending its push into blockchain. In June 2023, the financial services firm announced that its stablecoin issuance platform "Progmat Coin" will be used by banks to launch Japanese yen-pegged stablecoins on several public blockchains. MUFG dropped its blockchain payments project GO-Net Japan in February 2022 to focus on its stablecoin initiatives.

MUFG plans blockchain test for Japanese government bond settlement on Canton Network. Highlights * MUFG is testing real-time blockchain settlement for Japanese government bond repo transactions using Canton Network technology. * The pilot targets Japan's ¥270 trillion repo market while keeping government bonds off the blockchain. * Tokenized deposits and stablecoins may handle payments, with commercial deployment targeted between 2027 and 2029. Japan's Mitsubishi UFJ Financial Group is testing blockchain-based settlement for government bond repo transactions, targeting faster transfers in a market with outstanding balances of about ¥270 trillion. MUFG tests real-time JGB repo settlement. MUFG has started a proof of concept focused on settling Japanese government bond repo transactions through blockchain infrastructure. The project aims to replace the current T+1 process with a system that can settle the payment and securities sides of a transaction at the same time. Japan's JGB repo market had outstanding balances of about ¥270 trillion in 2025. Under the existing process, financial institutions may need to maintain additional funds while waiting for transactions to settle. MUFG is testing whether faster settlement can reduce that requirement. The trial involves MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities and Mitsubishi UFJ Trust and Banking. Repo transaction information from Mitsubishi UFJ Morgan Stanley Securities will provide settlement instructions for the blockchain-based system. Canton Network and Progmat support blockchain trial. The proof-of-concept combines infrastructure from Progmat with technology from Digital Asset, the developer behind Canton Network. Canton provides blockchain infrastructure designed for financial institutions that need transaction privacy while connecting different participants and financial applications. MUFG plans to test atomic delivery versus payment, or DvP, through the system. Under this structure, payment and the corresponding securities transfer are completed together, rather than leaving a period between the two settlement steps. The Japanese government bonds themselves will remain within the country's existing book-entry system rather than being issued as blockchain tokens. The blockchain layer will instead synchronize settlement records, avoiding the legal and operational questions involved in directly tokenizing JGBs. Tokenized deposits and stablecoins considered for payments. MUFG is considering tokenized bank deposits and stablecoins as payment instruments for the settlement process. Tokenized deposits represent traditional bank deposits on blockchain infrastructure, allowing value to move digitally while remaining denominated in fiat currency. Japan's major banks have also been developing stablecoin infrastructure that could support blockchain-based financial transactions. The JGB repo project provides another potential use for those payment instruments within institutional markets. MUFG expects to complete the proof-of-concept by the end of 2026. Commercial deployment could begin as early as fiscal 2027, with the broader rollout targeted between fiscal 2027 and fiscal 2029. For more secure blockchain settlement, explore the best institutional custody solutions for tokenized assets to manage counterparty and cryptographic risks. Investment disclaimer: The content reflects the author's personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses. Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over its editorial content. BestChange Instant Currency Exchange at BestChange with Ease * Compare Rates Across 1000+ Exchanges * Access 250+ Cryptocurrencies & Pairs * Save Time with Real-Time Price Tracking * Trusted & Verified Exchange Listings Why Trust CoinGape * Latest * / * Trending

MUFG eyes instant JGB repos as blockchain invades bond markets. MUFG has launched a pilot to test whether Japanese government bond repo trades can settle in real time on a blockchain network. Key takeaways. * MUFG began a 2026 pilot for on-chain Japanese government bond repo settlement. * Canton could support real-time JGB trades and more efficient use of capital. * Japan's FSA-backed pilot will test legal and operational hurdles next. The major Japanese banking group is working with Digital Asset, creator of the Canton Network, and Progmat on the proof of concept. Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank are also participating. Repo trades keep markets moving. A repo, short for repurchase agreement, is a short-term financing deal. One party sells securities, such as Japanese government bonds, and agrees to buy them back later. These deals are a basic tool for banks, securities firms and other large investors. Japanese government bonds, known as JGBs, are widely used as collateral because they are highly liquid and backed by the Japanese government. In conventional markets, completing a trade can take time and require several separate systems to update their records. That can leave firms holding extra cash and collateral while they wait for settlement. MUFG tests a different settlement model. MUFG's pilot will not replace the legal form of JGBs with blockchain-issued tokens. Instead, the bonds will remain book-entry transfer bonds under Japan's existing system. The blockchain would synchronize changes to the account registers maintained by the institutions that manage the bonds. Payment and delivery would occur together, a process known as delivery versus payment, using digital money such as tokenized bank deposits or stablecoins. Canton was designed for institutional finance and allows transaction details to be shared only with the parties that need to see them. The Switzerland-based Secured Finance AG will provide a lending protocol, or automated system, intended to handle the full repo process through smart contracts. Faster trades could free up capital. For banks and securities firms, faster settlement could make funding and collateral more efficient. It could also support intraday repo trades, where positions open and close on the same trading day. MUFG explained that the pilot aims to automate operational work and expand the settlement window. A system that operates in near real time could eventually reduce the amount of capital firms set aside to manage settlement delays. The effort is part of Japan's Financial Services Agency Payment Innovation Project, which selected the related pilots in February 2026. MUFG said it plans to work with regulators and domestic and overseas financial institutions as the project develops. Japan's market pushes further onchain. The pilot adds to Japan's broader work on digital financial infrastructure. MUFG has previously pursued security tokens, tokenized financial assets, and digital-money projects, including a previous plan with other major banks for stablecoin transactions in fiscal 2026. The test does not guarantee a commercial service. Legal coordination, links to existing market systems, and participation from a wide range of institutions will shape whether the approach can move beyond the pilot stage. Readers should watch for the pilot's results, regulatory discussions and any details on how digital money would be used to settle trades. Those steps will determine whether a major part of Japan's bond market can move toward faster, around-the-clock operations. Yesterday Fear Last Week Fear Last Month Fear How do you feel about the market today?