Progmat, Japan's largest security-token platform backed by Mitsubishi UFJ Financial Group, completed the migration of ¥452 billion ($2.8 billion) in tokenized real estate and corporate bond assets from R3's Corda 5 to an Avalanche Layer 1 network on July 12, 2026. The move — internally designated...
"We're moving Progmat ST from Corda5 to Avalanche, making all ST deals EVM-compatible and progressively permissionless… Japan's private blockchain networks function like private dirt roads. Attracting global liquidity requires building a public highway." — Tatsuya Saito, Founder & CEO, Progmat
Progmat, Japan's largest security-token platform backed by Mitsubishi UFJ Financial Group, completed the migration of ¥452 billion ($2.8 billion) in tokenized real estate and corporate bond assets from R3's Corda 5 to an Avalanche Layer 1 network on July 12, 2026. The move — internally designated "Project Keystone" — represents the single largest regulated securities migration from a permissioned ledger to a public blockchain recorded to date.
The platform commands 53.4% of Japan's security-token market by deal count and 64.6% by cumulative issuance value, according to BOOSTRY's FY2025 Japan Security Token Market Report. With Japan's digital securities sector projected to exceed ¥1.05 trillion ($7 billion) by the end of 2026, the infrastructure shift carries implications far beyond a single platform. Progmat has already convened a working group comprising Japan's three megabanks, BlackRock Japan, and five additional financial institutions to study tokenizing the ¥1.6 trillion Japanese government bond repo market on the same Avalanche infrastructure.
Project Keystone moved the entire Progmat security-token stack — smart contracts, asset records, and settlement logic — from a permissioned Java-based Corda 5 environment to a dedicated Avalanche L1 running Solidity-based EVM contracts. The migration was first announced on February 25, 2026, with a scheduled completion target of end-June 2026. According to Progmat, the platform completed the transition on July 12, 2026 without operational disruption to issuers or investors.
Key performance metrics reported by Progmat (not independently verified):
| Metric | Before (Corda 5) | After (Avalanche L1) | |--------|------------------|----------------------| | Smart contract language | Java | Solidity (EVM) | | Transaction finality | Variable | Sub-2 seconds | | Rights transfer speed | Baseline | 3–5x faster | | Cross-chain compatibility | None | EVM-compatible |
Progmat deployed a new "mediator" architecture that separates business logic from blockchain dependencies, facilitating future multi-chain connectivity. Infrastructure was provisioned through AvaCloud, Ava Labs' managed service layer, which carries SOC 1 and SOC 2 Type II compliance certifications, according to Ava Labs.
Nick Mussallem, CEO of AvaCloud, stated that executing a ¥452 billion regulated securities migration without disruption "sets a new benchmark for institutional-grade blockchain infrastructure."
The portfolio consists of tokenized corporate bonds and real estate investment products originally introduced by Japanese financial institutions since 2022. Progmat manages 45 active projects out of 89 total in Japan's security-token market, representing ¥231.3 billion in project management and ¥439.6 billion in total domestic AUM.
Japan's security-token market has grown steadily under a clear regulatory framework provided by the Financial Instruments and Exchange Act (FIEA). According to the BOOSTRY FY2025 Japan Security Token Market Report published by Nomura Holdings in April 2026:
The market is bifurcated between two primary platforms. Progmat holds the dominant position with 63% of cumulative issuance volume and 53.8% of total projects. BOOSTRY, a joint venture between Nomura Holdings and SBI Holdings, operates the competing ibet platform. Asset classes are concentrated in tokenized real estate and corporate bonds, though both platforms are expanding toward equities, investment trusts, and money market funds.
Japan's approach differs from most jurisdictions in that its regulatory framework was established before market development rather than in response to it. The Financial Services Agency (FSA) set governance standards for security tokens under FIEA, requiring no additional regulatory approval for the Corda-to-Avalanche migration. Securities remain regulated; institutions remain supervised. The infrastructure layer changed; the compliance layer did not.
Progmat's departure from R3's Corda represents a strategic pivot from permissioned to public blockchain infrastructure. Tatsuya Saito, Progmat's founder and CEO, characterized Japan's existing private blockchain networks as "private dirt roads," arguing that accessing global capital flows requires "a public highway."
Three factors drove the transition:
1. Interoperability. Corda's architecture is closed by design. Assets on Corda cannot interact with DeFi protocols, cross-chain bridges, or the broader EVM ecosystem without custom middleware. Moving to EVM-compatible infrastructure opens the theoretical possibility of secondary market liquidity from global participants, though regulatory constraints still govern who can actually trade Japanese security tokens.
2. Developer ecosystem. Solidity is the most widely deployed smart contract language, with a developer pool significantly larger than Corda's Java-based CorDapp ecosystem. Progmat's conversion from Java to Solidity broadens its hiring pipeline and reduces long-term maintenance risk.
3. Cost and performance. Following the Avalanche9000 upgrade activated on December 16, 2024, the cost to launch a dedicated Avalanche L1 dropped from a continuous 2,000 AVAX stake to a flat monthly fee starting at 1.33 AVAX per validator. Progmat reported 3–5x improvements in rights-transfer speed and sub-2-second finality, compared to Corda's variable settlement times.
It is worth noting that Corda retains significant enterprise deployments globally, particularly in trade finance and central bank digital currency pilots. Progmat's exit does not indicate a sector-wide collapse of the Corda platform, but it does signal that regulated financial institutions are increasingly willing to consider public blockchain settlement layers when the compliance wrapper is adequate.
The Progmat migration adds approximately $2.8 billion to Avalanche's tokenized asset footprint. Prior to this, Avalanche's institutional deployments included:
Tokenized assets on Avalanche reached approximately $2.1 billion by early 2026 before the Progmat migration, with network RWA value having grown 950% year-over-year, according to a VanEck research note.
The Avalanche9000 upgrade fundamentally altered the network's institutional economics. The subnet architecture — now rebranded as "Avalanche L1s" — enables permissioned environments that inherit the C-Chain's security model while maintaining independent governance, validator sets, and compliance rules. For regulated entities like Progmat, this means they can control access to their L1 while retaining the option for interoperability with the broader public network.
AvaCloud, the managed infrastructure layer, handles node operations, monitoring, and compliance tooling. Its SOC 1 and SOC 2 Type II certifications address the audit requirements that banks and asset managers typically demand.
Progmat launched a "Tokenized Government Bonds & On-Chain Repo Working Group" in May 2026 under its Digital Asset Co-Creation Consortium (DCC). The initiative targets Japan's ¥1.6 trillion JGB repo market — approximately 10% of the $16 trillion global repo market for government bond collateral, according to a February 2026 Financial Stability Board report.
Participants:
| Category | Institutions | |----------|-------------| | Megabanks | MUFG, Mizuho Bank, Sumitomo Mitsui Banking Corporation | | Asset managers | BlackRock Japan, State Street Trust Bank | | Securities firms | Daiwa Securities, SBI Securities | | Insurance | Tokio Marine Holdings |
The working group's stated objectives:
The working group will publish its findings in October 2026, with a target to launch a commercialization project before year-end 2026. The proposal tokenizes only the economic rights linked to book-entry government bonds — not the bonds themselves — sidestepping existing settlement infrastructure and tax complications.
If this initiative proceeds to production, it would represent the first deployment of on-chain settlement for a G7 government bond repo market. The scale differential between Progmat's current ¥452 billion in tokenized assets and the ¥1.6 trillion repo market underscores the potential magnitude of this next phase.
Progmat's migration occurs within a broader acceleration of real-world asset tokenization globally. As of early July 2026, according to RWA.xyz:
The DTCC ran its first live tokenized securities trades in July 2026, authorized through an SEC no-action letter from December 2025. JPMorgan, Goldman Sachs, and BNY Mellon have all launched tokenized money market products or related blockchain infrastructure.
What distinguishes the Japanese market is its regulatory maturity. While the US operates through enforcement actions and no-action letters, and Europe phases in MiCA compliance deadlines, Japan's FIEA framework has provided a stable legal foundation for security tokens since before the current tokenization cycle began. The Progmat migration required no new regulatory approval — an indicator that the compliance infrastructure was already in place when the technology decision was made.
The Progmat migration is a data point, not a narrative. A single platform moved $2.8 billion in regulated assets from a permissioned ledger to a public chain. The migration required no regulatory change because Japan's legal framework was already designed to be infrastructure-agnostic.
The more consequential development may be what follows. The JGB repo working group, convened just weeks after the Avalanche migration completed, points toward a market 3.5 times the size of Progmat's current asset base. If Japan's three megabanks, BlackRock Japan, and their consortium partners proceed to production, it would mark the first on-chain settlement of a G7 sovereign bond repo market.
The economic logic is straightforward: 24/7 trading, T+0 settlement, and potential capital efficiency gains from same-day position management. The technical infrastructure now exists. The regulatory framework predates the technology choice. What remains is execution — and the October 2026 working group report will provide the first concrete assessment of feasibility.