Mitsubishi UFJ Financial Group (MUFG) is advancing blockchain-based market infrastructure with a new proof-of-concept for real-time settlement of Japanese government bond (JGB) repo transactions. Announced on Aug. 13, the trial brings four MUFG companies together with Digital Asset and Progmat to test onchain settlement using the Canton Network.
The project is designed to synchronize existing JGB book-entry transfer records with blockchain records rather than issuing entirely new tokenized bonds. The bonds would retain their legal status as book-entry transfer bonds, while account registers are updated in conjunction with onchain activity. For the cash leg, MUFG is considering tokenized deposits or stablecoins.
One part of the proof-of-concept will focus on delivery-versus-payment settlement between JGBs and digital money, aiming to reduce the risk that one side settles without the other. A second workstream, led by Secured Finance AG, will test automating the full repo transaction lifecycle through smart contracts.
The initiative was selected in February 2026 under Japan’s Financial Services Agency Payment Innovation Project. That program is intended to address legal, supervisory and compliance questions before new payment and settlement models reach the public. MUFG Bank and Mitsubishi UFJ Morgan Stanley Securities will act as market participants, while MUFG Bank and Mitsubishi UFJ Trust and Banking will handle account management roles.
MUFG pointed to similar blockchain repo pilots abroad, including intraday U.S. Treasury repos on JPMorgan’s Kinexys network. The bank says JGBs’ high credit quality and deep liquidity make them well suited for onchain settlement experiments. The project remains a proof-of-concept, with no commercial launch date or regulatory approval announced.
