Progmat, Japan's dominant security token platform backed by Mitsubishi UFJ Financial Group (MUFG), completed the migration of ¥452 billion ($2.8 billion) in tokenized securities from R3's Corda 5 distributed ledger to a dedicated Avalanche Layer 1 network on June 30, 2026. The move, internally de...
"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, Founder & CEO, Progmat
Progmat, Japan's dominant security token platform backed by Mitsubishi UFJ Financial Group (MUFG), completed the migration of ¥452 billion ($2.8 billion) in tokenized securities from R3's Corda 5 distributed ledger to a dedicated Avalanche Layer 1 network on June 30, 2026. The move, internally designated "Project Keystone," represents the largest single migration of regulated financial assets from a private enterprise blockchain to a public EVM-compatible environment.
The migration converted Java-based Corda smart contracts into Solidity, accelerated transaction finality from multiple seconds to under two, and positioned Progmat's tokenized real estate and corporate bond portfolio on the same technical standard as Ethereum-native institutional products such as BlackRock's BUIDL. Separately, a 40-institution working group — including BlackRock Japan, MUFG, Mizuho, Nomura, and State Street — is now exploring tokenized Japanese Government Bond (JGB) repo settlement using stablecoins, targeting a $1.6 trillion daily market currently operating on T+1 rails.
The implications extend beyond Japan. Enterprise blockchain infrastructure is visibly shifting from closed permissioned networks toward public chain architectures that offer interoperability with the broader institutional DeFi ecosystem.
Project Keystone migrated the entirety of Progmat's security token issuance and management infrastructure — covering over ¥452 billion in tokenized assets — from Corda 5 to a dedicated Avalanche L1 blockchain. The portfolio includes tokenized corporate bonds and real estate investment products that Japanese financial institutions have issued since 2022.
The technical redesign introduced a "mediator" architecture that separates core business logic from specific blockchain dependencies. This abstraction layer sits between the ledger and its applications, allowing Progmat to connect with other chains without rebuilding issuance, ownership, and transfer processes from scratch. Existing Java-based Corda smart contracts were converted to Solidity-based EVM contracts without altering operational specifications or disrupting enterprise participants.
Performance metrics improved materially. Transaction processing speeds increased 3x to 5x, according to Progmat. Transaction finality — the time after which a transaction is irreversible — dropped to under two seconds, enabling near-instantaneous settlement compared to Corda's longer confirmation windows.
To meet institutional security requirements, the platform integrated Ava Labs' AvaCloud infrastructure, which carries SOC 1 and SOC 2 Type II compliance certifications. Nick Mussallem, CEO of AvaCloud, noted the migration of over ¥452 billion in regulated securities occurred without operational disruption, establishing what he characterized as institutional-grade blockchain benchmarks.
The migration reflects a structural shift in how financial institutions evaluate blockchain infrastructure. Corda was designed as a private, permissioned ledger optimized for bilateral settlement between known counterparties. It excels at enterprise workflows where confidentiality and controlled access matter more than composability with external networks.
The limitation became apparent as institutional tokenization moved toward interoperability. Japan's tokenized securities were isolated on Corda — unable to interact with Ethereum-native products, public stablecoins, or the emerging institutional DeFi ecosystem. Progmat selected Avalanche because its L1 (formerly "subnet") architecture allows institutions to build customized permissioned blockchain environments while maintaining connectivity to the broader network's security and interoperability features.
EVM compatibility was the decisive factor. By moving to Solidity-based contracts, Japan's tokenized securities now operate on the same technical standard as BlackRock's BUIDL, Ondo's OUSG, and forthcoming yen-denominated stablecoins. This opens pathways for cross-border settlement, DvP transactions with stablecoin cash legs, and programmatic interaction with DeFi protocols — none of which were feasible on Corda.
R3, Corda's developer, appears to recognize this trend. In January 2026, R3 announced a strategic collaboration with the Solana Foundation to bring institutional-grade yield to Solana DeFi, and by early 2026, R3's Corda networks had accumulated $17 billion in tokenized real-world assets. The pivot signals that even enterprise blockchain vendors acknowledge the composability advantages of public chain environments.
Progmat commands approximately 63% of Japan's tokenized securities market by issuance value, according to the company. The broader Japanese digital securities market is projected to surpass ¥1.05 trillion ($7 billion) by the end of 2026, according to data referenced in Progmat's working group materials.
The market composition is narrow. Tokenized real estate dominates, with each token requiring a trust structure under which beneficiary certificates are tokenized. Corporate bonds represent the second-largest asset class. There have been no public offerings of security tokens in Japan to date — all issuances have occurred via private placements to qualified institutional investors (QII).
Progmat was founded by MUFG and is backed by Japan's three megabanks: MUFG, Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho. MUFG is separately preparing to offer Japan's first yen-denominated tokenized money market fund to institutional investors in 2026.
The regulatory environment is evolving in parallel. In April 2026, Japan's Cabinet approved a bill to amend the Financial Instruments and Exchange Act (FIEA) that would reclassify crypto-assets as financial products, subject to Diet approval, with implementation targeted as early as fiscal 2027. Mandatory disclosure requirements, insider trading rules, and market manipulation laws will apply to token issuers starting in 2026. Japan has also expanded subsidies supporting blockchain-based securities, offering up to JPY 5 million ($31,500) per business for digital bond issuance.
The more consequential project may be Progmat's JGB repo tokenization working group, established on May 8, 2026. Japan's JGB repo market handles approximately $1.6 trillion in daily outstanding volume. Current settlement operates on T+1 — the bond moves on trade day, cash settles the next business day.
The working group aims to collapse that window to T+0 by converting JGBs into digital tokens and using stablecoins as the cash leg of the trade. Atomic delivery-versus-payment (DvP) settlement — where both the security and cash leg settle simultaneously or not at all — would eliminate counterparty risk inherent in sequential settlement.
The working group includes over 40 organizations:
Three options are under consideration for the cash leg: a yen-denominated stablecoin, USDC (which introduces foreign exchange conversion), or bank-issued deposit tokens. The choice will shape whether the system remains yen-native or opens a corridor to dollar-denominated settlement.
The working group's formal report is due in October 2026. A commercial launch is targeted by year-end 2026, though key infrastructure decisions — particularly around the stablecoin cash leg — remain unresolved.
Progmat's partnership with Datachain, announced on February 26, 2026, addresses the cross-chain dimension of post-migration settlement. Datachain's LCP (Light Client Proxy) solution uses Trusted Execution Environments (TEE), specifically Intel SGX, to facilitate cryptographic verification of cross-chain transactions.
This infrastructure enables two settlement modes:
The cross-chain approach is commercially significant. Project Trinity, announced in August 2025, moved DvP settlement toward commercial deployment. Project Pax, running since September 2024, has built cross-border stablecoin infrastructure with institutions in Europe, South Korea, and Japan. Datachain's cross-chain DvP activation is being considered alongside the first asset class settlement on the new Avalanche environment.
Progmat's migration is not an isolated event. It reflects a measurable trend of institutional assets moving from private enterprise blockchains to public or semi-public EVM-compatible environments.
Avalanche itself has seen its tokenized real-world asset value reach $2.1 billion as of July 2026, a 60% increase over the prior 30 days, according to RWA.xyz data. This places Avalanche fifth among networks ranked by distributed tokenized asset value, behind Ethereum (approximately $16 billion). BlackRock's BUIDL tokenized U.S. Treasury fund has grown to over $900 million on Avalanche. Bridgetower announced on July 13 that it had tokenized more than $11 billion in production-linked real-world assets on Avalanche using Chainlink technology.
Globally, Citi projects tokenized assets will reach $5.5 trillion by 2030. The infrastructure battle — which chain captures the settlement layer for these assets — is being decided now. Avalanche's strategy of offering permissioned L1 environments within a public network appears to be gaining traction with regulated financial institutions that require compliance controls without sacrificing composability.
Ethereum retains its dominant position in tokenized assets. Solana is attracting enterprise interest through R3's pivot. The competitive dynamic suggests tokenized securities infrastructure will be multi-chain, with institutional preferences shaped by latency, compliance tooling, and interoperability with existing DeFi liquidity.
Progmat's migration quantifies the economic logic driving enterprise blockchain's pivot to public chains. ¥452 billion in regulated securities now sit on EVM-compatible infrastructure with sub-two-second finality, positioned for cross-chain DvP settlement with stablecoins and interoperability with global institutional DeFi products.
The JGB repo working group represents the higher-stakes test. Compressing $1.6 trillion in daily settlement from T+1 to T+0 using on-chain atomic DvP would eliminate counterparty risk that has been a structural feature of fixed-income markets for decades. The October 2026 report and year-end pilot will determine whether this moves from working group to production infrastructure.
For the broader enterprise blockchain market, the signal is clear: institutions are willing to abandon sunk infrastructure costs on private chains when public chain composability offers measurable economic advantages — faster settlement, cross-border interoperability, and access to stablecoin liquidity. The question is no longer whether regulated securities will move on-chain. It is which chain captures the settlement layer.