Finance13 August, 20262 min read
MUFG Tests Canton Network Onchain JGB Repo Settlement With Digital Asset And Progmat
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MUFG tests on-chain JGB repo settlement using Canton Network with Digital Asset and Progmat. PoC to real-time settle JGB trades, replacing 1-3 day settlement.
MUFG’s JGB repo blockchain test
Mitsubishi UFJ Financial Group said on Aug. 13 that four MUFG companies will work with Digital Asset and Progmat on a proof-of-concept for Japanese government bond repo settlement using Canton Network.
MUFG said it will test onchain JGB repo settlement with Canton Network while synchronizing JGB book-entry records with blockchain and considering tokenized deposits or stablecoins for the cash side of settlement.
The bank said the PoC will test delivery-versus-payment settlement between JGBs and digital money to synchronize the securities leg with the cash leg and reduce the risk that one side settles without the other.
MUFG Bank and Mitsubishi UFJ Morgan Stanley Securities will act as market participants, while MUFG Bank and Mitsubishi UFJ Trust and Banking will serve as account management institutions and MUFG Bank will also act as the deposit-taking institution.
Japan’s Financial Services Agency selected the project under its Payment Innovation Project pilot program in February 2026, and MUFG said it did not name outside trading counterparties or provide a date for live commercial use.
Settlement speed and 24/7
CoinDesk said MUFG is preparing a proof-of-concept for onchain JGB transactions using the Canton network to expedite settlement that typically takes 1-3 days by traditional means. MUFG expects to improve the operational and capital efficiency of repo transactions through real-time 24/7 onchain settlement, aiming to replace the traditional settlement process with near-instantaneous settlement operating around the clock. MUFG said the project is narrower than simply issuing new tokenized JGBs, because it said the bonds would retain their legal status as book-entry transfer bonds while the relevant account register would be updated in conjunction with blockchain records.
The CoinDesk report also tied the effort to broader MUFG initiatives, including teaming with Sumitomo Mitsui Financial Group and Mizuho Financial Group to explore listing a jointly issued stablecoin by March 2027. MUFG said it expects this design could improve operational efficiency while supporting real-time intraday repo transactions and longer settlement windows, but it did not provide a completion date, production launch target, or transaction volume for the PoC.
Regulators, rails, and next steps
MUFG said the PoC will remain a proof-of-concept rather than a live 24/7 JGB market, and it said the plan is narrower than simply issuing new tokenized JGBs.
“Blockchain-based intraday U.S. Treasury-bond repos have existed for several years through JPMorgan’s Kinexys network, which went live in 2020.”
The bank said it expects to engage regulators and a wider group of domestic and overseas financial institutions while also working with Morgan Stanley, its strategic alliance partner.
Crypto News | Other said the FSA described the Payment Innovation Project as a way to address legal, supervisory and compliance questions before new payment and settlement models reach the public.
The report also placed MUFG’s work in a wider Japanese blockchain effort, noting that Japan Securities Clearing Corporation, Mizuho, Nomura and Digital Asset have tested JGBs as digital collateral on blockchain infrastructure.
MUFG pointed to Europe and the U.S. as models, including JPMorgan’s Kinexys network that went live in 2020 for blockchain-based intraday U.S. Treasury-bond repos, while for Japan the next steps were still experimental.