Tokenized JGB × On-chain Repo: Progmat-led Coalition of 42+ Organizations Targets T+0, 24/7 Settlement

Participants and Big Picture

The secretariat is Progmat (Tokyo, Chiyoda), a digital-asset issuance/management infrastructure provider that spun out from Mitsubishi UFJ Trust Bank in October 2023. It holds 64% cumulative issuance share in Japan's ST market across 10 intermediary users — the dominant domestic platform. The WG's official name is the "Tokenized JGB & On-chain Repo Working Group," kicking off May 2026, publishing a report October 2026, and starting TJGB structuring projects within 2026.

Composition and Configuration

Per CEO Tatsuya Saito's public materials, 42+ organizations participate. Financial members center on the three megabanks, Tokio Marine Holdings, Daiwa Securities, SBI Securities, BlackRock Japan, and State Street Trust Bank. Notably on the technology side, Canton Network (Digital Asset Holdings), Ava Labs (Avalanche), Datachain, and Secured Finance AG drive technology selection. Secured Finance already operates a yen-stablecoin on-chain repo lending protocol in foreign jurisdictions; Canton Network underpins the August 2025 on-chain US Treasury financing (with Bank of America, Citadel Securities, DTCC, etc.) and the December 2025 DTCC tokenization deal targeting H1 2026 MVP. Saito explicitly stated the design will be "public-chain-based to avoid Japan-specific Galapagos solutions."

Market Size

Per the Financial Stability Board's February 2026 report, the global government-bond-backed repo market reached approximately USD 16 trillion at end-2024 (about JPY 2,560 trillion at 160/USD), up 20% from 2022, with Japan accounting for roughly 10% (over JPY 250 trillion). The Bank of Japan's August 2025 survey notes that domestic repo balances have grown since 2010 with sharp acceleration since 2022, driven largely by yen-funding demand from non-resident hedge funds.

Technical Scheme

Saito's initial hypothesis centers on "tokenizing rights linked to book-entry JGBs": the underlying JGB stays under the JGB custodian's control, while rights move on-chain. Settlement uses stablecoins, with auto-running 24/7 lending protocols. The shift from current T+1 (business-day-bound) settlement to on-chain T+0 / always-on maximizes "intraday alpha" for institutional investors, and by avoiding day-rolls, Basel risk-weight and leverage-ratio constraints can be circumvented. Multiple structural options are being considered in parallel — registered JGBs, book-entry JGBs, trust-wrapping, and bond-claim representation.

[Business Development Insights]

1. Institutional Intraday Trading Becomes the Next Frontier: The core value-add is that "positions don't roll overnight," sidestepping balance-sheet impact and Basel constraints. This represents a fundamentally different value proposition from retail real-estate STs and opens new alpha opportunities for hedge funds, bank ALM desks, and securities dealing operations. Significant openings emerge in B2B specialized fintech: intraday-liquidity solutions, real-time collateral management, and SC↔TJGB conversion gateways.
2. First Public-Chain-Native Institutional Infrastructure in 20 Years: Saito's explicit emphasis on Avalanche and Canton Network participation is significant. Japan's financial-market infrastructure has historically been built on closed, permissioned architectures (BOJ-Net, JASDEC, JPX); the on-chain repo WG breaks that pattern. With DTCC adopting Canton in the U.S. and Euroclear co-chairing the Canton Foundation in Europe, this positions TJGB as a "bridge" for global institutional money flowing into Japan. Firms designing RWA products must treat "optimize for Canton or Avalanche on Japan entry" as a core strategic decision variable.
3. DCC Membership (315 organizations) Becoming a Prerequisite for Japan's On-chain Finance Ecosystem: Progmat has methodically progressed from On-chain ST WG (2025) → Tokenized Equity WG (2025) → TJGB & On-chain Repo WG (2026), tokenizing the major institutional asset classes (MMF → equities → government bonds) in sequence. Without WG participation, structuring and distributing individual deals becomes practically difficult. Companies operating in the digital-asset domain should elevate early DCC membership and active WG engagement to the executive agenda. While U.S. midterm elections (2026) could slow U.S.-side policy, Japan progresses on its own track in parallel with the FY2026 Diet session FIEA amendments (including crypto-asset coverage).

[Sources]

• Tatsuya Saito (Progmat CEO), note "What's the Key to Going On-chain for JGB Trading?" (May 8, 2026) https://note.com/tatsu_s123/n/n410ce768db58
• Progmat press release "Joint Study on On-chain Repo for Tokenized JGB" (May 8, 2026) https://progmat.co.jp/news/2026-5-8-press/
• Nikkei, "Japan to Enable 24-Hour Trading of JGBs as Digital Securities by Year-End" (May 7, 2026) https://www.nikkei.com/article/DGXZQOUB020LC0S6A500C2000000/
• Bitbank Plus, "JGBs to Be Issued and Circulated as Blockchain-Managed Digital Securities" (May 7, 2026) https://bitbank.cc/knowledge/breaking/article/alh7kfxfp
• NADA NEWS, "Japan to Tokenize JGBs for 24/7 Trading" (May 7, 2026) https://www.nadanews.com/347689/
• CRYPTO TIMES, "JGBs On-chain: Megabanks Joint Study" (May 8, 2026) https://crypto-times.jp/news-japan-jgb-tokenization-onchain-repo-progmat/
• Bittimes, "JGB Tokenization WG Launches: Progmat Leads with 3 Megabanks" (May 8, 2026) https://bittimes.net/news/222164.html
• Secured Finance AG press release (May 8, 2026) https://prtimes.jp/main/html/rd/p/000000006.000172212.html
• FSB, "Vulnerabilities in Government Bond-backed Repo Markets" (Feb 2026) https://www.fsb.org/uploads/P040226.pdf
• Bank of Japan, "Tokyo Money Market Survey, August 2025" https://www.boj.or.jp/paym/market/data/market2510.pdf
• Tatsuya Saito note "Japan's On-chain Finance to Surpass JPY 1 Trillion in 2026" (Jan 3, 2026) https://note.com/tatsu_s123/n/n11d377cc095a
• DTCC press release "DTCC and Digital Asset Partner to Tokenize DTC-Custodied U.S. Treasury Securities on the Canton Network" (Dec 17, 2025) https://www.dtcc.com/news/2025/december/17/dtcc-and-digital-asset-partner-to-tokenize-dtc-custodied-us-treasury-securities