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MUFG to pilot real-time onchain settlement for Japanese bond trades
MUFG said onchain settlement could reduce typical JGB settlement times of 1 to 3 days by moving transactions to real-time 24/7 processing using the Canton network.
MUFG plans to test real-time settlement for Japanese government bond, or JGB, transactions using blockchain technology. According to CoinDesk, the Tokyo-based bank is preparing a proof-of-concept for onchain JGB transactions on the Canton network.
The bank expects the project to support faster settlement than traditional processes, which typically take 1 to 3 days. MUFG also said the approach could improve operational and capital efficiency for repo transactions, which use securities as short-term borrowing and lending.
CoinDesk noted that blockchain-based intraday U.S. Treasury-bond repos have existed for several years through JPMorgan’s Kinexys network, which went live in 2020. MUFG framed its effort as part of broader industry momentum and similar proof-of-concept work in Europe and the U.S.
MUFG added that JGBs are widely used as collateral for repo transactions due to their liquidity and creditworthiness. The initiative also aligns with the bank’s other blockchain initiatives, including exploring a jointly issued stablecoin with Sumitomo Mitsui Financial Group and Mizuho Financial Group.