Can Japanese Government Bonds Also Trade 24/7? Progmat Partners with Canton Network to Explore Government Bond Tokenization and 24/7 On-Chain Settlement
Author: TechFlow
On November 9, 2026, Japanese digital asset platform Progmat Official Platform and Digital Asset Official Announcement signed a memorandum of understanding, planning to introduce sovereign assets such as Japanese Government Bonds (JGBs) to an institutional-grade blockchain network.
In its first phase, both parties will drive the integration of tokenized government bonds, tJGB, into Canton Network Official Specification, exploring 24/7 on-chain clearing while maintaining current legal enforceability and settlement finality.
Tokenization of Sovereign Assets Reaches Core Debt Infrastructure
With global sovereign bond markets exceeding $70 trillion, JGB outstanding debt ranks second worldwide. Over the past two years, tokenization efforts have mostly centered on packaging offshore short-term US Treasury funds. Their underlying assets operate outside sovereign clearing systems, restricting liquidity flows solely to the crypto ecosystem and failing to reach the core of interbank clearing.
Progmat’s initiative to natively tokenize JGBs into tJGB marks a shift in institutional focus from peripheral packaged funds to core sovereign credit. This evolution upgrades national credit instruments—traditionally bound by regional business hours—into fully digitized assets with round-the-clock liquidity, fundamentally reshaping sovereign debt circulation pathways.
Sub-Transaction Privacy Mechanism Breaks Institutional Broadcasting Barriers
The transparent broadcasting mechanism of public ledgers clashes with institutional financial requirements. Public blockchains demand that all network nodes synchronize every detail, leaving institutional portfolios, counterparties, and position adjustments fully exposed. This susceptibility to front-running and market squeezing hinders widespread adoption by heavily regulated entities.
Built upon Daml smart contracts, Canton Network Official Specification offers sub-transaction privacy mechanisms. The network permits trading parties to view only their respective data partitions, enabling cross-institutional atomic synchronized clearing without broadcasting transaction details across the entire network, precisely meeting banking regulatory compliance standards.
Unified Account Ledger System Achieves Round-the-Clock Delivery versus Payment
The traditional secondary bond market heavily relies on depository institution operating hours, typically following T+1 or T+2 settlement cycles. Market closures, holidays, and time zone discrepancies lead to significant capital-in-transit costs and accumulate counterparty default risks, severely constraining cross-currency capital turnover efficiency.
tJGB deeply integrates smart contract logic with securities transfer account books governed by current legal frameworks. By completely preserving statutory validity and settlement finality while breaking through rigid physical operating hours, it enables a continuous 24/7 Delivery versus Payment process.
Leveraging Collateral Reserves to Connect Cross-Time Zone Repo Networks
Within the multi-trillion-dollar global collateral and repurchase agreement market, JGBs serve as core safe-haven assets. Traditional clearing channels stagnate during off-hours, pushing high-quality sovereign bonds into temporary dormancy and preventing institutions from flexibly managing liquidity across different time zones.
Paired with tokenized deposits and compliant yen stablecoins, tJGB serves as an instantly accessible, round-the-clock collateral instrument. Institutions facing unexpected margin calls or overnight liquidity requirements across time zones can execute immediate pledging and financing, drastically reducing default risks triggered by clearing time-zone gaps.
Financial Consortium Collaboratively Advances Live Environment Validation
Major domestic Japanese financial giants have fully engaged in the system's development. Mitsubishi UFJ Financial Group Announcement has coordinated three affiliated institutions to participate collaboratively, primarily focusing on testing the feasibility of simultaneous settlement between tokenized bonds and digital fiat currency, and validating the on-chain processing capacity for end-to-end interbank repurchase agreements.
The Digital Asset Co-Creation Alliance working group under Progmat officially initiated the second phase of live validation in November 2026. This phase will test the issuance of tJGB, tokenized deposits, and stablecoins within the Canton production environment, validate repo operations, and progressively integrate with leading domestic and international collateral platforms.