Mitsubishi UFJ Financial Group has started a proof-of-concept to settle Japanese government bond repo trades on a blockchain in real time. The trial targets a repo market with outstanding balances of roughly $1.7 trillion and aims to replace multi-day settlement with an instant, simultaneous exchange of cash and bonds.
Japan's largest bank by assets has launched a proof-of-concept for settling Japanese government bond repo transactions on a blockchain in real time. The project targets a market with outstanding balances of ¥270 trillion, roughly $1.7 trillion.
Atomic settlement targets the multi-day gap
Repo trades work as short-term loans: one party sells a bond and agrees to buy it back later, usually the next day, but the cash and bond legs don't move at the same time. MUFG wants to fix that with atomic delivery-versus-payment, where the bond transfer and payment settle in a single, indivisible step. According to CoinDesk, the settlement MUFG is targeting typically takes 1-3 days by traditional means. Crypto Briefing describes the same trades as currently governed by a T+1 settlement cycle.
Bonds stay put, cash moves onchain
The bonds themselves aren't being tokenized. They stay within Japan's traditional book-entry system, with the blockchain layer handling synchronized updates, while the settlement side uses tokenized deposits or stablecoins. The stack combines the Canton Network, Progmat's platform, and protocols from Secured Finance AG, with three MUFG entities participating: MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities, and Mitsubishi UFJ Trust and Banking.
Part of a broader onchain push
MUFG said momentum for bringing JGBs onchain is growing given their use as collateral in repo transactions by market participants in Japan and overseas. The bank recently teamed up with Sumitomo Mitsui Financial Group and Mizuho Financial Group to explore listing a jointly issued stablecoin by March 2027. Similar intraday settlement work already exists elsewhere: blockchain-based U.S. Treasury repo has run through JPMorgan's Kinexys network since 2020.
The proof-of-concept is expected to wrap up by the end of 2026, with a commercial rollout targeted between fiscal years 2027 and 2029.
Sources: CoinDesk, Crypto Briefing
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