MUFG to test real-time blockchain settlement for Japanese government bond trades

Mitsubishi UFJ Financial Group (MUFG) plans to usage blockchain exertion to offer faster colony of Japanese authorities enslaved (JGB) transactions, successful a determination reminiscent of akin initiatives by banks successful different countries.

MUFG is preparing a proof-of-concept for onchain JGB transactions utilizing the Canton web to expedite the settlement, which typically takes 1-3 days by accepted means.

The Tokyo-based slope expects to amended the operational and superior ratio of repo transactions — the acquisition of securities arsenic a signifier of short-term borrowing and lending — done real-time 24/7 onchain settlement.

MUFG noted that fiscal institutions successful Europe and the U.S. person expanded proof-of-concept projects to execute this nonstop goal. Blockchain-based intraday U.S. Treasury-bond repos person existed for respective years done JPMorgan’s Kinexys network, which went unrecorded successful 2020.

“Given their precocious recognition worthiness and liquidity, JGBs are wide utilized arsenic collateral for repo transactions by marketplace participants successful Japan and overseas, and momentum for bringing them onchain is growing,” MUFG said connected Wednesday.

The task forms portion of a broader array of MUFG initiatives exploring the usage of blockchain exertion successful accepted fiscal functions. Most recently, the slope teamed up with 2 of the largest Japanese banks, Sumitomo ⁠Mitsui Financial Group (SMBC) and Mizuho Financial Group, to explore listing a jointly issued stablecoin by March 2027.