Zenith Joins Progmat Working Group on Japan's $1.6tn Repo Market

Zenith, an Ethereum-compatible infrastructure layer built on Canton Network, has joined Progmat‘s Tokenised JGB / On-chain Repo Working Group, a consortium of Japanese and international financial institutions studying how blockchain technology could be applied to Japan’s government bond repo market. The group kicked off in May 2026 and is targeting a comprehensive report for October, with potential tokenised JGB issuance pilots to follow before year-end.

The working group operates under the Digital Asset Co-Creation Consortium and brings together MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, State Street Trust and Banking, SBI Securities, Japan Exchange Group’s Market Innovation and Research division, and BlackRock Japan, among others. The immediate focus is a joint study on tokenising rights to Japanese Government Bonds and executing fully on-chain repo transactions using those bonds as collateral alongside stablecoin cash legs via lending protocols.

Table of Contents

Why the repo market matters

Japan’s JGB repo market is estimated at between ¥250trillion and ¥270trillion, roughly equivalent to $1.6trillion, accounting for approximately 10 per cent of the global government bond-backed repo segment. Settlement in traditional repo is operationally intensive: multi-day cycles, bilateral custody, manual reconciliation and limited operating hours constrain liquidity and raise counterparty risk. The working group’s stated targets include same-day settlement, round-the-clock availability and simplified cross-border access, outcomes that, if achieved at scale, would materially reduce the cost of securities financing for participants.

Heslin Kim, co-founder and chief business officer at Zenith, described the initiative as positioning the firm “at the forefront of bringing real-world assets on-chain,” adding that it could “transform liquidity in Japan’s $1.6trillion repo market for global investors.” The quote carries the standard promotional register of an announcement; the more substantive measure will be the October report and whether any issuance pilot names a live clearing or custody counterparty.

Market context and regulatory backdrop

Japan has become one of the more active markets in Asia for tokenised securities, with cumulative issuance now reported at above JPY 360 billion, though that figure is concentrated in real estate products rather than sovereign debt. The Progmat-led effort represents a meaningful step up in asset class and systemic scale.

Globally, tokenised US Treasuries have attracted significant institutional interest, with several programmes now processing live settlement through distributed ledger infrastructure. Japan’s initiative follows a comparable logic but operates within a distinct regulatory environment. The Financial Services Agency has been broadly supportive of security token frameworks under Japan’s amended Financial Instruments and Exchange Act, and Progmat itself is a platform developed within that framework. Regulatory read-across to European markets is limited for now, though MiCA’s treatment of tokenised financial instruments and the EU’s DLT Pilot Regime are establishing precedents that Japanese regulators will monitor.

For Zenith, the strategic value of the consortium membership is positioning on Canton Network, the institutional blockchain that counts JPMorgan, DTCC, Nasdaq and Goldman Sachs among its partners and processes a reported $9trillion in monthly volume. Contributing to protocol design and interoperability standards in a high-profile public study raises profile ahead of any commercial deployment, though Zenith’s specific technical role within the working group was not detailed in the announcement. The October report will be the first concrete test of whether the consortium’s ambitions translate into deployable infrastructure.