. The planned product would also
link to an existing securities transfer account-book system
.
Under the plan, the tokens would stay tied to Japan's official bond register. Reporting on an earlier phase of the initiative explains that
the underlying government bonds remain managed in the Bank of Japan's book-entry transfer ledger and held by a designated JGB custodian
, as described by BigGo Finance. The aim is to keep the bonds' legal status intact while allowing round-the-clock settlement.
TokenPost notes that
the settlement capabilities are project goals, not completed features
.
Working Group to Test Repo Transactions
The testing will be run by a working group within Progmat's Digital Asset Co-Creation Consortium (DCC). According to TechFlow,
the Tokenized Government Bonds and On-Chain Repo working group has attracted participation from over 68 institutions
. It plans to
launch the second phase of live pilot testing in November, deploying a sandbox on Canton to issue tJGBs, tokenized deposits, and stablecoins
, and to connect progressively to repo and collateral platforms.
Repos are short-term loans secured by bonds. The group's stated aim is to pair tokenized bond collateral with stablecoin or tokenized deposit cash legs. When the working group was set up in May,
the plan was to settle same day (T+0) using an on-chain lending protocol, compared with next business day (T+1) settlement for traditional repo using bank deposits
.
Major Japanese banks are already involved in related work. Securities Finance Times reported that the working group includes
MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, State Street Trust and Banking, SBI Securities, and Japan Exchange Group's Market Innovation & Research
. Separately,
MUFG and three affiliated financial institutions have announced participation in related work to test delivery-versus-payment for government bonds and digital currency, along with the full repo trading process
.
The initiative reflects a broader push to bring sovereign debt onto blockchain rails, with Canton positioned as infrastructure for regulated institutions. The pilot results will show whether on-chain repo can work at scale with Japan's existing bond settlement framework.
Sources
TokenPost: Progmat, Digital Asset Holdings Plan Tokenized Japanese Government Bonds
TechFlow: Progmat partners with Canton developers to advance Japanese government bond tokenization
Securities Finance Times: Zenith joins working group to tokenise JGB repo market onchain
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