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Mitsubishi UFJ Financial Group is running live blockchain tests on Japanese government bond repo trades. The goal: fully automated, 24-hour on-chain settlement — no waiting, no traditional clearing lag.
Three MUFG units are involved. Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank are all part of the trial, working alongside Digital Asset Holdings and Progmat to see whether Canton Network’s infrastructure can handle repo transactions in real time. Repo deals — where one party sells securities and agrees to buy them back later — are bread-and-butter for big bank funding desks, but they’re also notoriously slow and capital-heavy under legacy systems. The trial puts Japanese government bonds at the center of the experiment, using Canton’s blockchain to automate what’s normally a clunky, multi-step process. The pitch is simple: faster settlement means assets sit idle for less time, which means better capital efficiency across the board.
Canton Network isn’t new to tokenized government debt.
Japan’s FSA Is Backing the Experiment
The trial runs under Japan’s Financial Services Agency Payment Innovation Project, known as PIP, which launched in November 2025. PIP isn’t just a sandbox — it comes with legal and compliance support, which matters a lot when you’re dealing with government bonds and regulated repo markets. An earlier project involving Japanese government bonds and blockchain-based securities settlement already got PIP backing, so MUFG’s trial fits a pattern the FSA seems comfortable with.
MUFG’s involvement goes deeper than just the Canton trial. The group is also part of Progmat’s Tokenized JGB / On-chain Repo Working Group, which is specifically looking at whether tokenized Japanese government bonds can serve as collateral in repo transactions. That working group includes other major banks — Mizuho and Sumitomo Mitsui are both in — plus Progmat and Zenith on the infrastructure side. The group is targeting a comprehensive report by October 2026, though no final outcomes have come out yet. Still experimental. Still pending further analysis and regulatory sign-off.
The T+0 settlement question is probably the biggest one the group is wrestling with. T+0 means a trade settles the same day it’s executed — pretty much the holy grail for repo markets, where timing directly affects how much liquidity a bank can deploy. Cross-border access is also on the table, which would be a big deal for Japan’s repo market given its scale.
Canton Network’s Growing Institutional Footprint
Digital Asset, the company behind Canton, raised $355 million in June, with Andreessen Horowitz leading the round. That’s a serious vote of confidence in the tokenized settlement infrastructure play. The funding is meant to push Canton’s capabilities further — broader tokenized issuance, faster settlement, more asset classes.
Canton’s track record outside Japan is worth noting. S&P Dow Jones Indices and Kaiko used the network for a Treasury index earlier, integrating smart-contract infrastructure to manage the iBoxx U.S. Treasuries index. So the network has handled tokenized government securities before, just not Japanese ones at this scale or with this regulatory wrapper.
MUFG’s relationship with Progmat goes back several years. In 2023, MUFG was exploring stablecoin issuance through Progmat, working within Japan’s regulated digital asset framework. That came after MUFG wound down a previous blockchain payment project — basically a pivot toward regulated token issuance rather than trying to build proprietary rails. Progmat became the platform of choice for that strategy.
The stablecoin angle hasn’t disappeared either. The working group is apparently thinking about how stablecoins could link securities transfers with digital currency payments in these repo transactions — essentially closing the loop between the bond leg and the cash leg on-chain. Unclear yet exactly how that would work in practice, but it’s on the agenda.
And the logic makes sense. Right now, repo transactions involve a lot of handoffs — between custodians, clearing houses, payment systems. If you can run the bond transfer and the cash transfer simultaneously on the same blockchain, you cut out most of that friction. MUFG seems to think Canton can do that. The October 2026 working group report will probably say a lot about whether the numbers actually back that up.
Digital Asset secured its $355 million round with Andreessen Horowitz leading.
Frequently Asked Questions
Which banks are participating in MUFG’s Canton Network repo trial?
Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank are running the trial alongside Digital Asset Holdings and Progmat, with Mizuho and Sumitomo Mitsui also involved in the broader working group.
How much did Digital Asset raise and who led the round?
Digital Asset raised $355 million in June, with Andreessen Horowitz leading the funding round to expand its tokenized settlement infrastructure.
