Japan’s largest security token platform moves nearly $3 billion to Avalanche blockchain

Japan's dominant digital asset issuance and management platform Progmat has completed its migration to the Avalanche blockchain.

According to a recent blog post, Progmat moved its entire security token platform — including all active tokenized assets worth over ¥452 billion (about $2.7 billion) — from a private, permissioned ledger based on Corda 5 to a dedicated public Avalanche Layer 1.

"Rather than a straight swap of one ledger for another, Progmat redesigned the underlying architecture so the platform is no longer tied to any specific blockchain, making it easier to facilitate a multi-chain platform as requirements evolve," the blog dated July 10 reads.

"All existing smart contracts were ported to EVM without changing the behavior or specifications of any live project, and financial institutions continued operating normally throughout," it continues. "The most tangible result: rights transfer processing is now approximately 3 to 5 times faster than the pre-migration environment."

The migration, first announced in February, finished on schedule with zero disruption to the financial institutions using the platform.

Progmat was originally developed inside Mitsubishi UFJ Trust and Banking (aka MUFG), Japan’s largest bank, and spun out into an independent company in October 2023. It is heavily backed by major Japanese financial institutions, including Mizuho, the Tokyo Stock Exchange, and SBI. 

By moving to Avalanche, the blog claims Progmat’s rights-transferring process is now “3 to 5 times faster,” with finality in under two seconds.

Progmat dominates Japan’s security token market, with about 53% of the market share and 64.6% of the total issuance value, according to the blog. This includes the majority of tokenized real estate and corporate bonds in Japan.

By moving from a closed, domestic-only system visible only to Japanese financial institutions to a public, EVM-compatible chain, the blog notes Progmat’s assets are now more readily open to global participants and interoperability with the broader blockchain ecosystem.

According to the blog, Progmat launched a Tokenized Government Bonds & On-Chain Repo Working Group in May with asset managers, banks, and securities firms to examine tokenized Japanese Government Bonds (JGBs). The group is reportedly studying the impact of 24/7 trading and same-day (T+0) settlement for JGBs.