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Japan tests blockchain versions of its government bonds on Canton

Writer: Shawn Jhanji
Shawn Jhanji
22 hours ago
3 min read

Progmat, the Japanese platform for issuing digital securities, and Digital Asset, the developer of the Canton Network, announced on 10 November 2026 a memorandum of understanding to create tokenised Japanese government bonds. Live testing with a working group of more than 68 organisations is due to begin this month.


A hand places a Japanese government bond puzzle piece into an emerging digital financial infrastructure, surrounded by interconnected elements representing Canton Network, UK digital gilts, regulation, repo markets, tokenised cash, collateral and 24/7 settlement. The Tokyo skyline and Mount Fuji provide the backdrop, while gaps in the puzzle symbolise the unfinished pieces of the global tokenisation ecosystem.

A government bond is a loan to the state. Tokenising it means recording it as a digital token on a blockchain, a shared database, so it can change hands and settle at any hour. Government bonds are the collateral much of finance runs on, so when they can move around the clock, the tokenised cash and assets that startups build products around can move with them.


What Progmat and Digital Asset signed

Progmat will add support for the Canton Network and link the on-chain record to Japan's existing book-entry register, the official list of bond holders kept by account management institutions. Digital Asset says the tokens, called tJGB, would keep the legal status of ordinary book-entry government bonds and the finality of settlement.


The two firms will also study services that let financial institutions run their own Canton nodes, the computers that hold and validate the shared record. Neither firm has given a date for a full launch.


How the repo trial on Canton Network works

The working group was set up in May 2026 inside a consortium hosted by Progmat. Its live phase gives members a test environment on Canton for issuing tokenised bonds alongside tokenised deposits or stablecoins, digital tokens that hold a fixed value in a currency.


Four MUFG companies, announced on 13 August 2026, will test paying for bonds and cash in a single step, and running the full life of a repo trade on-chain. A repo is a short-term loan in which one side hands over bonds as security for cash and buys them back later.


Progmat says it handles 51 of 103 publicly disclosed Japanese security token projects, worth over ¥2,906 billion out of more than ¥4,703 billion. That is about 62 per cent by value, so a change in its platform reaches most of the Japanese market at once.


How the UK digital gilt differs

The UK is testing the opposite model. HM Treasury said on 3 November that the Digital Gilt Instrument will be born digital inside the Digital Securities Sandbox, issued through HSBC Orion and reachable through LSEG's platform, with a pilot expected by the first quarter of 2027. The sandbox approvals set out which firms can run it.


Japan keeps the legal record where it is and adds a token linked to it. The UK puts the legal record on the new ledger itself. The view here is that Japan's route carries less legal risk and can reach existing bonds quickly. The counter argument is that two linked records still need reconciling, which is the cost tokenisation is meant to remove.


For UK founders building tokenisation or collateral products, both point the same way: regulated government bonds are becoming programmable. LSEG already validates the Canton Network, and the Bank of England is consulting on tokenised collateral for clearing houses.


Key takeaways

  • Progmat and Digital Asset announced on 10 November 2026 a plan for tokenised Japanese government bonds on the Canton Network.

  • The tokens would keep the legal status of ordinary book-entry bonds, linked to Japan's existing register.

  • Live repo and settlement tests with more than 68 organisations, including four MUFG companies, are due to start in November 2026.

  • Progmat handles about 62 per cent by value of Japan's publicly disclosed security token projects.

  • The UK's digital gilt instead issues a new bond directly on a ledger inside the Digital Securities Sandbox, with a pilot expected by early 2027.


References


This article is general information, not legal, tax or investment advice.


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