Author: Shenchao TechFlow
On November 9, 2026, Japan’s digital asset platform Progmat Official Platform signed a memorandum of understanding with Digital Asset Official Announcement to introduce sovereign assets, such as Japanese Government Bonds (JGBs), onto an institutional-grade blockchain network.
In the first phase, both parties will work to integrate the tokenized government bond tJGB with the Canton Network official specification, exploring round-the-clock on-chain settlement seven days a week, while preserving existing legal validity and settlement finality.
Tokenization of sovereign assets touches the core debt infrastructure.
The global sovereign bond market exceeds $70 trillion, with Japan’s government debt ranking second globally. Over the past two years, tokenization efforts have primarily focused on packaging offshore short-term U.S. Treasury funds, with underlying assets detached from sovereign settlement systems and liquidity confined solely to the crypto ecosystem, failing to reach the core of interbank settlement.
Progmat is driving the native tokenization of Japanese government bonds into tJGBs, marking a shift by institutions from peripheral packaged funds toward sovereign core credit. This evolution transforms nationally governed credit instruments, previously constrained by regional business hours, into digital assets with 24/7 liquidity, reshaping the pathway of sovereign debt circulation.
Sub-transaction privacy mechanism overcomes institutional broadcasting barriers
The transparent broadcasting mechanism of public ledgers conflicts with institutional financial requirements. Public blockchains require all network nodes to synchronize every detail, exposing institutional holdings, counterparties, and rebalancing pathways, making them highly vulnerable to front-running and squeezes, thereby hindering large-scale participation by regulated giants.
The official Canton Network specification, built on Daml smart contracts, provides sub-transaction-level privacy. The network allows only the transacting parties to access their respective data shards, enabling atomic cross-institution settlement without broadcasting details to the entire network, fully aligning with banking compliance requirements.
Achieve round-the-clock delivery versus payment through the account book system
The traditional bond secondary market heavily relies on custodian institution counters and commonly uses T+1 or T+2 settlement models. Market closures, holidays, and time zone differences result in high tied-up capital and accumulated counterparty risk, constraining the efficiency of cross-currency capital turnover.
tJGB deeply integrates contract logic with securities transfer ledgers under existing legal frameworks. Without compromising statutory validity or settlement finality, it eliminates the rigid constraints of physical service windows, enabling a 24/7 delivery-versus-payment process seven days a week.
Unlock collateral reserves to enable a cross-time-zone repurchase network
In the global collateral and repurchase market worth trillions of dollars, Japanese government bonds are a core safe asset. Traditional clearing channels halt during non-trading hours, causing high-quality sovereign debt to become temporarily dormant and preventing institutions from flexibly allocating liquidity across time zones.
By combining tokenized deposits with compliant Japanese yen stablecoins, tJGBs can become instantly available collateral around the clock. Institutions can instantly pledge and access funding when facing sudden margin calls or overnight liquidity needs across time zones, significantly reducing default risks caused by settlement delays.
Financial consortium collaboratively advances real-world testing and validation
Japan's leading financial giants have fully engaged in system development. 三菱日联金融集团公告 Three affiliated institutions are collaborating to conduct key tests on the feasibility of synchronized settlement for treasury tokenization and digital fiat currency, validating the blockchain's capacity to support end-to-end interbank repurchase transactions.
The Digital Asset Co-Creation Alliance Working Group under Progmat officially launched Phase 2 live testing in November 2026. This phase will test the issuance of tJGBs, tokenized deposits, and stablecoins in the Canton production environment, validate repurchase operations, and gradually connect with major collateral platforms both domestically and internationally.