FinanceMUFG to Pilot Real-Time Blockchain Settlement for Japanese Government Bonds

MUFG is set to launch a proof-of-concept for on-chain transactions of Japanese government bonds utilizing the Canton network.

By Jamie Crawley|Edited by Sheldon RebackUpdated 34 min agoPublished 49 min ago1 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on

MUFG is planning to test real-time settlement for Japanese government bonds. (JHVEPhoto/Shutterstock)Summary
  • MUFG aims to leverage blockchain to expedite the settlement process for Japanese government bond trades.
  • The bank is developing a proof-of-concept for on-chain JGB transactions using the Canton network.
  • Blockchain-enabled intraday repos for U.S. Treasury bonds have been operational for several years through JPMorgan’s Kinexys network, which launched in 2020.

Mitsubishi UFJ Financial Group (MUFG) intends to implement blockchain technology to accelerate the settlement of Japanese government bond (JGB) trades, mirroring similar efforts by banking institutions globally.

The Tokyo-based financial giant is currently working on a proof-of-concept for on-chain JGB transactions via the Canton network, aiming to reduce the traditional settlement time of 1-3 days.

MUFG anticipates that real-time 24/7 on-chain settlement will enhance the operational and capital efficiency of repo transactions, which involve the short-term borrowing and lending of securities.

The bank pointed out that various financial entities in Europe and the U.S. have expanded their proof-of-concept initiatives to achieve similar objectives. Notably, blockchain-based intraday repos for U.S. Treasury bonds have been available for a number of years through JPMorgan’s Kinexys network, which became operational in 2020.

“Due to their high credit quality and liquidity, JGBs are extensively utilized as collateral for repo transactions by market players in Japan and abroad, and there is a growing trend to move them on-chain,” MUFG stated on Wednesday.

This initiative is part of MUFG's broader strategy to explore blockchain applications within conventional financial operations. Recently, the bank collaborated with two major Japanese banks, Sumitomo Mitsui Financial Group (SMBC) and Mizuho Financial Group, to look into a jointly issued stablecoin set for release by March 2027.

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