The Collaboration Aims to Upgrade Traditional Securities Lending with Blockchain-Powered Tokenized Japanese Government Bonds and Stablecoin Repo

Zenith, the innovator of Ethereum-compatible digital asset infrastructure on Canton Network, announced it has joined Progmat’s high-profile Tokenized JGB / On-chain Repo Working Group. This elite consortium, backed by Japan’s biggest banks and global giants like BlackRock Japan, is set to revolutionize one of the world’s largest repo markets by moving tokenized Japanese Government Bonds (TJGBs) and repo transactions onto institutional-grade blockchain solutions.

Launched under the Digital Asset Co-Creation Consortium (DCC), the Working Group unites MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, State Street Trust and Banking, SBI Securities, Japan Exchange Group’s Market Innovation & Research, and other major players. The group is conducting an intensive joint study on tokenizing rights to Japanese Government Bonds and enabling fully on-chain repo transactions using tokenized JGB collateral paired with stablecoin cash legs via lending protocols.

Key innovations targeted include T+0 instant settlement, true 24/7 availability, and seamless cross-border access, unlocking new liquidity in Japan’s massive ¥250–270 trillion (approximately US$1.6 trillion) JGB repo market, which accounts for roughly 10% of the global government bond-backed repo market (estimated at approximately US$16 trillion).

This initiative comes as tokenized securities in Japan have already surpassed JPY 333–360 billion (approximately US$2.1–2.25 billion) in cumulative issuance, predominantly real estate-focused. The Progmat-led effort now aims to scale institutional-grade tokenized JGBs, potentially capturing a significant share of the $1.7 trillion repo ecosystem on-chain.

Heslin Kim, Co-founder and CBO at Zenith, said: “We are thrilled to join this game-changing initiative with Progmat and Japan’s financial powerhouses. As the canonical Ethereum-compatible execution layer for Canton Network, Zenith enables institutions and developers to natively deploy applications and customizable Virtual Blockchains that work seamlessly with Canton’s compliant, privacy-enabled infrastructure. This collaboration positions us at the forefront of bringing real-world assets on-chain and could transform liquidity in Japan’s $1.6 trillion repo market for global investors.”

The Working Group kicked off in May 2026, with a comprehensive report expected in October 2026 and potential TJGB issuance pilots targeted for later this year. Zenith will contribute actively to key areas including protocol design, interoperability standards, and regulatory compliant infrastructure.

As tokenized U.S. Treasuries gain global traction, Japan is poised to lead Asia in on-chain government-bond innovation, delivering faster settlement, reduced counterparty risk, and broader participation in its enormous repo market.

The curated selection process by the DCC and Zenith’s subsequent invitation reinforce Zenith’s fundamental position as the core scaling primitive for Canton Network’s global composability, encompassing all on-chain environments, protocols, and assets, while bridging traditional finance and blockchain for measurable efficiency gains at institutional scale.

Source: Zenith