MUFG Plans Proof of Concept for Tokenised JGB Intraday Repo on Canton Network

MUFG Group has announced a proof of concept (PoC) to bring Japanese government bond (JGB) repo transactions onto the Canton Network, with intraday settlement efficiency and funding optimisation as the stated goals. Initial transaction flows will run among group entities, specifically MUFG Morgan Stanley Securities and Mitsubishi UFJ Trust and Banking, with technology support from Progmat and Digital Asset. Participation by external market counterparties is envisioned but no timeline has been disclosed.

The PoC is structured around two distinct tracks. The first is onchain delivery versus payment (DvP) settlement of JGBs using digital money, a relatively contained scope. The second is considerably more ambitious: full automation of the repo transaction lifecycle using a lending protocol built by Switzerland-based Secured Finance, which joined Progmat’s JGB repo working group in May and has prior experience working with DigiFT on collateral utilisation infrastructure for uMINT, a tokenised money market fund issued by UBS.

The approach preserves compatibility with existing Japanese securities law by treating the tokenised bonds as digital twins of the underlying JGBs, with conventional book entry transfer account registers kept in sync with blockchain state changes. That design choice signals a deliberate effort to avoid regulatory friction while still capturing onchain settlement benefits, which is a pattern likely to recur as other Japanese institutions explore similar territory.