Progmat's DCC of 69 Firms Backs On-Chain JGB Management, Not a Bitcoin (BTC)-Style Token

69 Firms Back On-Chain Transfer JGBs

The Digital Asset Co-Creation Consortium (DCC), the industry body hosted by tokenization platform Progmat, formally published its interim report on Japanese government bond (JGB) tokenization on Thursday, Oct. 22, Tokyo time, one day after the outline reached Japanese media. The report is the work of a DCC working group that launched in May 2026 to examine how JGBs could be issued and circulated on blockchain infrastructure, and it counts 69 participating companies and organizations, among them Japan's three megabanks, Nippon Life Insurance and Daiwa Securities. The group compared three tokenization routes: managing bonds on the Bank of Japan's registered ledger, managing transfer JGBs held under the Act on Book-Entry Transfer of Corporate Bonds and Shares, and tokenizing linked rights that allow holders to demand delivery of transfer JGBs. Tax treatment settled the ranking. Financial institutions holding transfer JGBs benefit from a withholding-tax exemption on interest in transactions between financial institutions; registered JGBs and linked-rights tokens do not qualify, so either of those routes would require changes to the tax code. On that basis, the interim report designates keeping transfer JGBs intact and managing them on-chain as the preferred structure, describing it as the option with the least impact on market participants and the closest fit with existing procedures. The linked-rights route also carried unresolved questions: whether such tokens could preserve the same collateral value as the underlying bonds, and how they would satisfy the legal requirements for asserting a claim against third parties. The tax mechanics, not ledger features, set the economics here, a reminder that institutional tokenomics are decided in statute as much as in code.

OC Accounts Keep Bond Status Intact

The practical design centers on a new on-chain management account, an OC account, opened by account-management institutions such as banks and securities firms and synchronized continuously with distributed ledger technology. An institution shifts part of its existing transfer JGB holdings into the OC account under the same investor name, and the corresponding balance is then expressed on the DLT. Tatsuya Saito of Progmat has described the step as not a double issuance of new bonds; the same bond simply changes how it is administered. The working group adopted a structure in which OC account records on a system that runs 24 hours a day, 365 days a year and stays synchronized with the DLT serve as the master copy of the transfer ledger, while legacy systems take copies during business hours for surrounding processes. Testing starts narrow: one account-management institution holding a direct account at the Bank of Japan, where trades can settle without touching BoJ systems directly. Cross-institution transfers would run through API links to the Bank of Japan in its role as central securities depository, with the transfer confirmed once the existing record completes. The target is not a new product. The report aims at the bilateral repo trades that sit outside central clearing through the Japan Securities Clearing Corporation, estimating Japan's repo market at more than ¥250 trillion and placing roughly 40% of funding outside central counterparties. Post-trade confirmation, settlement and collateral management for those trades would run on-chain, letting non-resident banks and funds that cannot use BoJ intraday overdrafts move collateral “just in time” instead of holding pre-positioned buffers “just in case”. A second phase, targeted for a November kickoff, will test the design on Canton Network, where Progmat plans a sandbox issuing test tokenized JGBs, tokenized deposits and stablecoins, connected to domestic and overseas repo and collateral platforms. Institutional work is already underway: MUFG announced on Aug. 13, 2026 a joint demonstration with Progmat, Digital Asset and Secured Finance on on-chain JGB repo, supported by the Financial Services Agency's Payment Sophistication Project (PIP). In the United States, Broadridge's DLT-based repo platform reached a monthly processing volume of $8 trillion in July 2026, with a daily average of $365 billion, and DTCC is preparing tokenization services for US Treasury securities held at the DTC.

A Ledger Upgrade, Not New Bonds

Two features of this plan carry the weight. Japan's tokenized-securities market has so far been built around retail-oriented new products, largely real-estate security tokens; this interim report points the machinery at the post-trade plumbing of a ¥250-trillion institutional market instead, which is where the volume and the efficiency gains actually sit. The ledger philosophy also differs from a public chain. The OC account mirrors an existing bond rather than creating a tradeable instrument, and it is neither a governance token nor a wholly on-chain asset in the way Bitcoin (BTC) exists only on its own ledger; the JGB's legal status remains with the existing transfer system. The design likewise stops short of a DApp-style wholesale rebuild, keeping current trading channels and contracts in place while moving post-trade steps on-chain. Whether that incremental approach closes the gap with US repo rails is the question the November sandbox is built to answer.