Progmat and Digital Asset have signed a memorandum of understanding to put Japanese government bonds on Canton Network. Digital Asset announced the agreement on November 10. The two firms will build tokenized Japanese government bonds, called tJGB, that keep the legal status of ordinary book-entry bonds. Meanwhile, a working group of more than 68 organizations will begin live testing this month. The deal turns a months-long industry study into a concrete build.
🇯🇵 Japanese government bonds are set to be tokenized on Canton Network, under an agreement announced today between Progmat and Digital Asset. The numbers: • 68+ organizations in the working group, formed in May • MUFG, Japan’s largest bank, plus 3 affiliates set to test bond-for-cash settlement and full repo • 24/7 programmable settlement as the target • Live testing begins this month Progmat already handles 51 of Japan’s 103 disclosed security token deals, about ¥290.6B of ¥470.3B issued. canton-network:native
— King Solomon (Ryan Solomon) (@IOV_OWL) November 10, 2026
What the Agreement Covers
The first phase connects Progmat’s issuance platform to Canton Network. Progmat will also link the platform to Japan’s existing book-entry transfer register. As a result, each tJGB should carry the same legal effect as a conventional government bond. Settlement finality must hold as well, because institutions will not trade a bond that lacks it. After that, the partners will study services that let financial institutions run Canton nodes. Importantly, the target is programmable settlement that runs 24 hours a day, not a one-time pilot. Reports on the MOU describe those settlement features as project goals, not finished products.
Why Progmat Leads the Field
Progmat already dominates Japan’s security token market. According to the footnotes in Digital Asset’s release, the platform handles 51 of 103 publicly disclosed security token projects. Those deals represent about ¥290.6 billion of roughly ¥470.3 billion in issuance. In other words, Progmat touches more than six of every ten yen issued. Furthermore, the company hosts the Digital Asset Co-Creation Consortium, which runs the working group that formed in May. That position gives Progmat the relationships with issuers, distributors, and banks that a bond market requires. Digital Asset joined the group at the start and has shared Canton’s technical design and U.S. precedents.
MUFG Tests Settlement and Repo
MUFG supplies the most visible institutional weight. Four entities participate: Mitsubishi UFJ Financial Group, MUFG Bank, Mitsubishi UFJ Trust and Banking, and Mitsubishi UFJ Morgan Stanley Securities. Together they will test delivery-versus-payment, which swaps a tokenized bond for digital cash in one step. They will also test the full repo lifecycle, from the initial cash loan through repayment and the return of collateral. MUFG first disclosed the proof of concept in August under the Financial Services Agency’s Payment Innovation Project. The first stage settles bonds against tokenized deposits or stablecoins. The second stage automates repo with a lending protocol from Secured Finance. The group expects automation to cut processing costs and to support intraday transactions and longer settlement windows.
Why Canton Fits the Job
Digital Asset built Canton Network for regulated finance, and its design explains the choice. Canton uses the Daml smart contract language and a privacy model in which participants see only the transactions that concern them. That feature matters for bond repo, because banks do not want counterparties or competitors reading their positions. In addition, Canton aims to synchronize assets across institutions without forcing them to replace existing systems. Digital Asset has already pushed this model in the United States, where it completed on-chain Treasury financing work on the network. Japan now becomes a second sovereign bond market to test the approach.
What to Watch Next
The live phase will build a sandbox where participants issue test tJGBs, tokenized deposits, and stablecoins on Canton. Over time, the group plans to connect domestic and overseas repo and collateral platforms. However, several hurdles remain before any production launch. The partners must prove legal finality with the book-entry register, settle against reliable digital cash, and attract real liquidity. Regulators must also sign off on each step. Still, the scale of participation signals that Japanese institutions want 24/7 bond settlement. The November tests will show whether the technology can deliver it.
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