MUFG Wants Japan Bond Repo Trades to Settle in Seconds, Not Days

MUFG tests onchain settlement for government bond repos

Mitsubishi UFJ Financial Group (MUFG) has begun a proof-of-concept to settle Japanese government bond (JGB) repo trades on a blockchain. The trial runs on the Canton Network, a distributed ledger designed for regulated financial institutions. MUFG wants these settlements to happen in real time and around the clock. Repo trades are short-term loans secured by securities, and JGBs rank among the most widely used forms of collateral in Japan's money markets. MUFG says their high credit quality and deep liquidity make JGBs strong candidates for onchain settlement.

Three MUFG units join Digital Asset and Progmat

Three MUFG entities take part in the test: MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities, and Mitsubishi UFJ Trust and Banking. The group is working with Digital Asset, the developer of the Canton Network, and with Progmat, a Japanese blockchain infrastructure firm tied to the country's largest banks. Secured Finance AG, a Switzerland-based provider, supplies a lending protocol that runs the repo process through smart contracts. The work sits within a wider Progmat-led consortium that includes Japan's three megabanks and other financial firms.

Bonds stay inside Japan's traditional book-entry system

The proof-of-concept does not tokenise the bonds themselves. The JGBs stay inside Japan's existing book-entry transfer system, while the blockchain layer records synchronised updates. MUFG is aiming for atomic delivery-versus-payment, where the bond transfer and the cash payment settle together in a single, indivisible step. Traditional JGB settlement currently takes one to three days, a delay that ties up collateral and adds counterparty risk during the waiting window. The current process also depends on business-hours operation and manual reconciliation between separate systems.

Canton Network token price at time of publication

The Canton Network's native token, CC, traded at $0.098 at the time of publication, down 0.7% over the past 24 hours (CoinPaprika, 13 August 2026). The token carried a market capitalisation near $3.82 billion, placing it among the top 30 digital assets by value. CC first began trading in November 2025, according to market data, and remains far below its February 2026 peak.

JPMorgan and megabanks pursue similar settlement rails

MUFG pointed to comparable projects abroad. JPMorgan's Kinexys network, which launched in 2020, has supported intraday United States Treasury repo transactions for several years. MUFG is also pursuing a jointly issued stablecoin with Sumitomo Mitsui Financial Group and Mizuho Financial Group. The three banks aim to list that stablecoin by March 2027.

MUFG plans a commercial rollout by 2029

MUFG expects to complete the proof-of-concept by the end of 2026. The bank plans a commercial rollout between fiscal years 2027 and 2029, depending on the trial's results. Faster settlement could free up capital and tighten liquidity management for repo desks across domestic and cross-border markets. The bank frames the test as a step toward broader onchain market infrastructure.