MUFG Pilots On-Chain Repo Transactions for Japanese Government Bonds

The trial involves Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank, alongside Digital Asset Holdings and Progmat. By moving repo transactions—where securities are sold with an agreement to repurchase them—onto a distributed ledger, the participants intend to automate the transaction lifecycle. The move seeks to improve capital efficiency by enabling real-time, intraday settlement that operates outside standard market hours.

This initiative operates under the Payment Innovation Project, a regulatory sandbox overseen by Japan’s Financial Services Agency. The agency provides support for experiments involving payment infrastructure, legal compliance, and the integration of new technologies like tokenized collateral. Progmat, which previously established a working group to study tokenized government securities, is providing the underlying infrastructure for this effort. The current project builds on earlier trials that tested the use of government bonds as digital collateral and aligns with MUFG’s broader strategy of centralizing its digital asset operations around the Progmat platform.