Japan's regulated securities token market is executing a structural migration from private enterprise blockchains to public chain infrastructure. Progmat, the platform responsible for 63% of cumulative issuance volume in Japan's security token market, announced on February 26, 2026, that it will ...
"We're moving Progmat ST from Corda5 to Avalanche, making all ST deals EVM-compatible and progressively permissionless." — Tatsuya Saito, CEO, Progmat Inc.
Japan's regulated securities token market is executing a structural migration from private enterprise blockchains to public chain infrastructure. Progmat, the platform responsible for 63% of cumulative issuance volume in Japan's security token market, announced on February 26, 2026, that it will migrate over ¥439.6 billion ($2B+) in tokenized real estate and corporate bonds from R3's Corda 5 to a dedicated Avalanche Layer 1, with completion targeted by end of June 2026. The shift marks the largest single-platform migration of regulated financial products to a public blockchain on record.
Simultaneously, a consortium of over 40 institutions — including MUFG, Mizuho, Sumitomo Mitsui, BlackRock Japan, Daiwa Securities, SBI Securities, and Tokio Marine Holdings — launched a working group in May 2026 to tokenize Japan's ¥240 trillion ($1.6T) government bond repo market on blockchain rails. The group targets T+0 settlement using tokenized JGBs paired with stablecoins, replacing the current T+1 standard. A formal report on legal, tax, and operational issues is due October 2026, with commercial issuance targeted before year-end.
Japan's digital securities market doubled in FY2025 to a cumulative ¥333.3 billion across 82 issuances, according to the BOOSTRY Japan Security Token Market Report published April 2, 2026. BOOSTRY forecasts FY2026 annual issuance of ¥200 billion and cumulative volume of ¥530 billion. Separately, Progmat projects the broader market will exceed ¥1.05 trillion ($7B+) by end of 2026 — a figure that would place Japan among the top three jurisdictions globally for on-chain regulated securities.
BOOSTRY's FY2025 market report, published via Nomura Holdings on April 2, 2026, provides the most granular view of Japan's tokenized securities market:
| Metric | FY2025 | Cumulative | |--------|--------|------------| | Total issuance | ¥165 billion | ¥333.3 billion | | Number of tokens issued | 24 | 82 | | Real estate trust beneficiary securities | ¥140.8 billion (85%) | — | | Corporate bond security tokens | ¥20.4 billion | — | | Private equity trust beneficiary securities | ¥2.4 billion | — | | Silent partnership equity interests | ¥1.4 billion | — | | Deals exceeding ¥10 billion | 7 | — | | START Market capitalization | ¥33.6 billion | 8 tokens |
The cumulative total roughly doubled compared to the end of FY2024. BOOSTRY forecasts FY2026 issuance at ¥200 billion, which would bring the cumulative figure to ¥530 billion. Progmat's own projections are more aggressive: total outstanding domestic ST issuances are projected to exceed ¥583.1 billion in 2025, expanding to ¥1.0531 trillion in 2026.
Real estate dominates the asset mix at 85% of FY2025 issuance volume. Seven deals exceeded ¥10 billion in size — a concentration pattern that suggests institutional, not retail, demand is driving volume. The START secondary market, operated by the Osaka Digital Exchange, lists eight tokens with combined market capitalization of ¥33.6 billion.
Progmat completed its migration to Corda 5 SaaS in October 2024. Fourteen months later, it announced abandonment of the platform entirely. The decision reflects a structural limitation in enterprise distributed ledgers: Corda offered compliance-grade privacy and permissioning, but lacked interoperability with public blockchain ecosystems where liquidity and composability increasingly reside.
The migration to Avalanche L1 addresses this gap. Key technical parameters:
The migration preserves the application layer; only the chain layer is being replaced. Existing issuers — trust banks and securities companies — retain their operational workflows. The change is infrastructural, not functional, for end users.
MUFG founded Progmat but restructured it as a joint venture in October 2023 with equity participation from Japan Exchange Group (JPX), Mizuho, SMBC, and SBI. This ownership structure aligns major competing financial institutions around shared infrastructure — a pattern more common in traditional market utilities (clearinghouses, depositories) than in blockchain ventures.
The migration is not a standalone technical decision. It is the foundation for Project Keystone, Progmat's cross-chain settlement service. The project uses LCP (Light Client Proxy), a protocol developed with Datachain that runs on Trusted Execution Environments (TEEs) and implements the IBC (Inter-Blockchain Communication) standard.
Project Keystone enables two settlement primitives:
Delivery versus Payment (DvP): Atomic settlement between security tokens on one chain and stablecoins on another. A tokenized real estate bond on Avalanche can settle against USDC on Ethereum or a yen-pegged stablecoin on a separate chain in a single atomic transaction.
Payment versus Payment (PvP): Atomic exchange between stablecoins across jurisdictions. A yen stablecoin can settle against a dollar stablecoin without intermediary banks or correspondent banking rails.
These capabilities extend beyond Avalanche. Progmat has stated that cross-chain settlement will cover security tokens issued on multiple blockchains, positioning the platform as a chain-agnostic settlement layer for regulated digital assets.
In May 2026, a separate but related initiative launched under Progmat's coordination: the Digital Asset Co-Creation Consortium. Over 40 institutions are exploring tokenization of Japan's ¥240 trillion ($1.6T) government bond repo market — approximately 10% of the global $16 trillion repo market.
Participating institutions include:
The repo market is the financial system's short-term funding backbone. Institutions lend and borrow cash using government bonds as collateral, typically settling on T+1. The consortium's proposal: replace T+1 with T+0 using tokenized JGBs paired with stablecoins on blockchain rails, enabling 24/7 instant settlement.
A formal report covering legal, tax, and operational feasibility is due October 2026. Individual proof-of-concept projects will run in parallel. The consortium targets commercial deployment before year-end 2026.
For context, the U.S. DTCC processed over $330 billion in tokenized Treasury transactions, but Japan's initiative is broader in scope — targeting the full repo lifecycle rather than isolated settlement functions.
Separately, Mizuho, Nomura, and Japan Securities Clearing Corporation (JSCC) launched a proof-of-concept in April 2026 using Digital Asset Holdings' Canton Network for tokenized JGB collateral management, with completion targeted by September 30, 2026.
Japan's regulatory framework for digital securities is among the most developed globally. The Financial Services Agency (JFSA) classifies security tokens under the Financial Instruments and Exchange Act (FIEA), applying the same substantive requirements as traditional securities. This approach — regulating the economic substance rather than the technology — has enabled institutional participation without requiring new legislative frameworks.
Key regulatory developments in 2026:
The JFSA's approach contrasts with the U.S., where tokenized securities face jurisdictional uncertainty between the SEC and CFTC, and with the EU, where MiCA primarily addresses crypto-assets rather than tokenized traditional securities.
The global tokenized RWA market (excluding stablecoins) reached approximately $27.6 billion in April 2026, according to industry data. Tokenized U.S. Treasuries represent the largest single category at $12.88 billion. Ethereum holds approximately 65% of total distributed RWA value on-chain.
Japan's projected ¥1.05 trillion ($7B+) market by end of 2026 would represent a significant share of the global total. Several comparisons:
| Jurisdiction | Notable Activity | Scale | |-------------|-----------------|-------| | United States | BlackRock BUIDL fund, DTCC tokenized Treasuries | $12.88B in tokenized Treasuries | | Japan | Progmat migration, JGB repo tokenization | ¥1.05T ($7B+) projected by end 2026 | | Singapore | MAS-authorized token service providers | Multiple pilot programs | | Switzerland | SIX Digital Exchange live since 2021 | Regulated exchange operational | | Germany | eWpG framework for digital securities | Legal framework enacted |
Japan's approach differs from most jurisdictions in one critical respect: it is migrating existing, operational financial infrastructure to public chains, rather than building parallel experimental systems. Progmat is not a pilot. It processes the majority of Japan's security token volume today.
The migration from Corda to Avalanche shifts economic value distribution across the technology stack.
Under the Corda model, value accrued primarily to R3 (licensing fees), node operators (infrastructure costs), and the closed ecosystem of permissioned participants. Settlement was confined to bilateral or multilateral agreements within the network.
Under the Avalanche L1 model, value distribution changes:
The open question is whether the composability benefits — access to on-chain stablecoins, cross-chain settlement, secondary market liquidity — generate sufficient economic value to offset the reduced control inherent in public chain infrastructure. Japan's regulatory framework, which permits permissioned validator sets on Avalanche L1s, attempts to bridge this gap.
For the ¥240 trillion repo market, the economic implications of T+0 settlement are substantial. Intraday settlement eliminates overnight counterparty risk and frees collateral currently locked in T+1 settlement cycles. The capital efficiency gains, even at basis-point levels, translate to billions of yen annually across the market.
Japan is executing a migration of regulated financial infrastructure from private to public blockchain at a scale not attempted elsewhere. The Progmat migration is not experimental: it involves operational systems managing 63% of a national securities token market. The repo market initiative, if successful, would place a $1.6 trillion asset class on blockchain settlement rails.
The pattern is distinctive. Rather than building greenfield blockchain projects, Japanese institutions are moving existing, compliance-tested financial products onto public chain infrastructure while maintaining permissioned controls at the validator level. The approach treats public blockchains as utility infrastructure — equivalent to switching from proprietary telecommunications networks to the public internet while maintaining encrypted channels.
Whether the June 2026 migration deadline holds, and whether the repo market consortium produces actionable recommendations by October 2026, will determine whether Japan's tokenized securities market reaches its ¥1.05 trillion projection. The institutions involved — Japan's three megabanks, its largest securities firms, and global managers like BlackRock — suggest this is not a speculative exercise. It is an infrastructure decision by organizations that collectively manage trillions of dollars in assets.