Japan's dominant security token platform Progmat completed its migration of ¥452 billion ($2.8 billion) in tokenized real estate and corporate bonds from R3's Corda 5 permissioned ledger to a dedicated Avalanche Layer 1 blockchain on July 10, 2026. The operation, code-named Project Keystone, conv...
"The completion of this Avalanche integration represents a landmark moment where the Japanese security token market connects directly with the global real-world asset ecosystem." — Tatsuya Saito, CEO, Progmat
Japan's dominant security token platform Progmat completed its migration of ¥452 billion ($2.8 billion) in tokenized real estate and corporate bonds from R3's Corda 5 permissioned ledger to a dedicated Avalanche Layer 1 blockchain on July 10, 2026. The operation, code-named Project Keystone, converted all smart contracts from Java to Solidity without disrupting live institutional operations. It is the largest single migration of regulated securities from a private to a public blockchain recorded to date.
The move places Progmat — a former Mitsubishi UFJ Trust and Banking (MUFG) venture that controls 53.4% of Japan's security token deals by count and 64.6% by issuance value — on EVM-compatible infrastructure. The shift opens a path toward cross-chain composability, stablecoin-settled repo trades, and eventual tokenization of Japanese Government Bonds (JGBs) in a market that clears approximately $1.6 trillion in daily repo volume.
Progmat announced the Avalanche migration in February 2026 and completed it by end of June 2026, going live on July 10. The infrastructure overhaul redesigned the platform's architecture around a "mediator" abstraction layer that separates core business logic — issuance, ownership transfer, settlement — from the underlying blockchain. This allows Progmat to operate across multiple chains without rebuilding each function from scratch.
The migration converted existing Java-based Corda smart contracts into Solidity-based EVM contracts. According to Progmat, the conversion preserved all operational specifications. No active enterprise participants experienced disruption during the transition.
Performance data from internal testing shows:
The Avalanche L1 runs as an application-specific network — not a retail trading venue. Public wallets cannot freely trade the tokens. Institutions handling the securities remain supervised under existing Japanese financial regulations.
Japan's digital securities sector has grown from a regulatory experiment into a structured market. According to the BOOSTRY FY2025 Market Report published by Nomura Holdings on April 2, 2026:
| Metric | FY2025 | Cumulative | |--------|--------|------------| | Issuance volume | ¥165 billion | ¥333.3 billion | | Tokens issued | 24 | 82 | | Deals exceeding ¥10B | 7 | — |
Real estate trust beneficiary securities accounted for ¥140.8 billion (~85%) of FY2025 issuance. Corporate bond tokens contributed ¥20.4 billion. Private equity trust beneficiary securities and silent partnership equity made up the remainder.
BOOSTRY projects FY2026 issuance at ¥200 billion and cumulative issuance at ¥530 billion. Separate industry estimates from Progmat and its consortium suggest the broader Japanese digital securities market will exceed ¥1.05 trillion ($7 billion) by end of 2026.
The secondary market remains small. The Osaka Digital Exchange's START platform lists 8 tokens with a combined market capitalization of ¥33.6 billion as of March 2026.
Progmat's share of this market is substantial. The platform hosts 45 of 89 disclosed projects, worth ¥231.3 billion. Its 53.4% deal share and 64.6% issuance value share make the Avalanche migration a de facto infrastructure decision for the majority of Japan's regulated digital securities.
Progmat CEO Tatsuya Saito has framed the choice in infrastructure terms. He described Japan's previous private blockchain networks as "private dirt roads" and said that attracting global liquidity requires building a "public highway."
The Corda-to-Avalanche shift reflects a broader pattern across institutional tokenization. R3's Corda, once the default for regulated financial applications, has lost ground as institutions prioritize EVM compatibility and cross-chain composability over the isolation that permissioned ledgers provide.
The decision was not abstract. Progmat identified specific operational limitations with Corda 5:
Avalanche's L1 model addressed each constraint. Application-specific L1 chains (formerly called Subnets) allow Progmat to run an independent validator set with custom governance rules while maintaining native interoperability with the primary Avalanche network and, by extension, EVM-based protocols globally.
This shift mirrors the earlier decision by SBI Holdings to migrate from Corda to Solana for its Global Japan strategy, and aligns with a broader institutional trend away from permissioned-only infrastructure.
The Avalanche migration is precursor infrastructure for Progmat's largest ambition: tokenized Japanese Government Bonds.
In May 2026, Progmat established a Tokenized Government Bonds and On-Chain Repo Working Group within its Digital Asset Co-Creation Consortium. The group includes over 40 institutions:
The working group's mandate: study 24/7 trading and same-day (T+0) settlement for JGBs using stablecoin-based delivery-versus-payment (DvP) mechanisms. The current JGB repo market settles on a T+1 basis.
Japan's repo market clears approximately $1.6 trillion in daily outstanding volume — roughly 10% of the $16 trillion global repo market as of end-2024, according to Nikkei Asia. Moving even a fraction of this volume to on-chain settlement would represent an order-of-magnitude increase in blockchain-settled value compared to current RWA volumes globally.
The working group plans to publish its legal and taxation report in October 2026, with a commercialization project targeted before year-end 2026. The cash-leg stablecoin has not been named; candidates include a yen-denominated token, USDC, or bank-issued deposit tokens. Japan's three largest banks — MUFG, SMBC, and Mizuho — have separately announced plans to jointly issue yen-based stablecoins by the end of the current fiscal year.
The Bank of Japan's posture on providing tokenized digital reserves for the settlement layer remains unresolved. This is a material variable: without central bank settlement finality, on-chain repo trades carry counterparty risk that the current BoJ-backed system does not.
The migration raises a question that matters for every institutional tokenization project: does moving to a public chain compromise regulatory compliance?
Progmat's architecture suggests the answer is no, with caveats. The Avalanche L1 is application-specific. Token transfers require compliance checks at the platform layer. The underlying assets — real estate trusts, corporate bonds — remain regulated securities under Japan's Financial Instruments and Exchange Act.
The compliance stack includes:
Progmat has also commercialized Delivery Versus Payment (DvP) and Payment Versus Payment (PvP) services on the new infrastructure, using Avalanche's ICM and Datachain's IBC/LCP technology for cross-chain settlement.
The infrastructure sits alongside other institutional Avalanche deployments in Japan. TIS Inc.'s Multi-Token Platform and the Ponta loyalty program's Mugen Chain already operate on Avalanche L1s, suggesting a clustering effect in Japanese institutional blockchain adoption around the Avalanche ecosystem.
Progmat's migration occurred in the same month that DTCC's $114 trillion tokenization pilot moved toward its October 2026 launch, and as BIS Project Agorá neared Phase 1 results. These three initiatives — Progmat in Japan, DTCC in the U.S., and Agorá internationally — represent the closest the institutional world has come to running regulated securities on public or semi-public blockchain infrastructure at production scale.
Stablecoin circulation on Avalanche increased 48% in the week following the Progmat announcement. BlackRock's BUIDL fund holdings on Avalanche doubled during the same period. These are not necessarily causal, but the directional correlation is notable.
The Progmat migration also tests a thesis: that private-to-public migration can be executed at scale without regulatory friction. If the model holds — regulated assets, compliant infrastructure, public chain settlement — it provides a template for similar migrations in South Korea, Singapore, and the EU, where tokenized securities frameworks are also maturing.
The economic value captured in this transaction flows across multiple layers: Avalanche validators process settlement, AvaCloud earns infrastructure fees, Datachain captures interoperability revenue, and Progmat retains its platform fees on issuance and transfer. This multi-layered value distribution mirrors the economic structures documented across other institutional blockchain deployments.
Progmat's migration from Corda to Avalanche is a data point, not a narrative. It demonstrates that regulated securities can move from private to public blockchain infrastructure at billion-dollar scale without regulatory disruption. The technical execution — zero downtime, full contract conversion, 3-5x settlement improvement — sets an operational benchmark.
The migration's significance lies less in the $2.8 billion already moved and more in what it enables: a potential path to tokenized JGB settlement in a $1.6 trillion daily repo market. Whether that path materializes depends on unresolved questions about stablecoin infrastructure, central bank participation, and cross-border interoperability that no amount of technical migration can answer alone.
The market will provide data. The October 2026 working group report and year-end commercialization target will determine whether this migration was foundational infrastructure or an expensive proof of concept.