MUFG to Test On-Chain Repo Transactions Using Japanese Government Bonds

Mitsubishi UFJ Financial Group (MUFG), Japan’s largest financial group, along with its subsidiaries Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank, announced the launch of a proof of concept (PoC) for conducting on-chain repo transactions using Japanese government bonds.

The project is being carried out in partnership with several technology companies:

• Digital Asset will provide the tokenization infrastructure built on the Canton Network.
• Progmat, Japan’s largest digital asset management platform by publicly issued security tokens under management, will integrate blockchain technology with Japan’s government bond registry system and adapt the solution for real world use.
• Secured Finance will automate the entire repo transaction lifecycle.

The project’s goal is to test the migration of the full repo transaction lifecycle to blockchain infrastructure with simultaneous delivery versus payment (DvP) settlement. It will also evaluate the use of tokenized bank deposits or stablecoins as digital cash for settlement. At the same time, the legal status of Japanese government bonds as uncertificated securities will be preserved by synchronizing the existing registry system with the blockchain infrastructure.

MUFG expects that automating the entire repo lifecycle will improve operational efficiency. Real time intraday settlement is also expected to improve liquidity and capital utilization, while expanding the available windows for transaction processing. The automation will use the lending protocol developed by Swiss company Secured Finance AG.

The initiative was selected as one of the pilot projects under the Payment Innovation Project, which was approved by Japan’s Financial Services Agency (FSA) in February 2026. Once testing is complete, MUFG plans to discuss potential implementation with regulators and market participants, including international financial institutions. The company also intends to continue developing the initiative with its strategic partner, Morgan Stanley.

MUFG has continued to expand its blockchain finance initiatives. Together with Mizuho Bank and Sumitomo Mitsui Banking Corporation (SMBC), the group plans to issue a joint stablecoin for commercial settlements. It is also implementing JPMorgan’s Kinexys Fund Flow platform to automate settlement for investment funds. Meanwhile, the Japan Securities Clearing Corporation (JSCC) is also testing the use of Japanese government bonds as collateral for blockchain settlement on the Canton Network.