Japanese $2.7 billion securities assets are tokenized on-chain—why is traditional finance collectively betting on Avalanche?

By Climber, CryptoPulse Labs

Recently, Progmat, Japan’s largest tokenized securities platform, has officially completed its migration to Avalanche Layer1. All tokenized securities assets worth more than 452B yen (about $2.7 billion) have been fully migrated on-chain.

Compared with a typical technical upgrade, this is more like an important iteration of Japan’s financial infrastructure. When traditional financial institutions begin migrating core business to more open, high-performance blockchain networks, it also means that tokenized securities are entering a new stage of development.

I. A Big Migration Behind It: Japan’s Tokenized Securities Market Enters a New Phase

Progmat is not a typical blockchain company; it is one of the most important pieces of infrastructure in Japan’s tokenized securities market. It was initially incubated by Mitsubishi UFJ Trust Bank (MUFG) and began independent operations in 2023.

It has already secured support from many Japanese financial institutions, including Mizuho Bank, the Tokyo Stock Exchange, SBI, and more. It holds 53% of Japan’s tokenized securities market share, 64.6% of the total tokenized securities issuance scale, and covers multiple asset classes including real estate and corporate bonds. In other words, most tokenized securities assets in Japan run on this system.

What’s most worth关注 about this migration is that Progmat has abandoned the permissioned chain it previously built on Corda 5, and instead adopted Avalanche’s dedicated Layer1 as its new underlying architecture.

In recent years, Corda has been widely used as a consortium blockchain solution across the global banking industry. It offers advantages such as strong privacy protection, well-developed permission management, and ease in meeting regulatory requirements—so many financial institutions have adopted it as the preferred option for blockchain pilots.

However, as the scale of tokenized securities continues to expand, the limitations of such consortium chains have gradually become apparent. A closed ecosystem makes it difficult for assets to interoperate with other blockchains; developing new applications requires repeated large cost outlays; and it is also hard to share the innovations continually emerging across the broader Web3 ecosystem.

Therefore, Progmat’s migration is not only a replacement of the underlying system, but also a shift in its technical route.

After all smart contracts are migrated to an EVM environment, the platform keeps the original business logic unchanged, but the speed of asset and rights transfers increases by 3 to 5 times. The time for final transaction confirmation is shortened to within 2 seconds. In the future, it will also be able to support more blockchain network integrations, enabling a truly multi-chain architecture.

More importantly, the entire migration process does not affect the normal operations of any financial institution, which also proves that blockchain infrastructure has the capability to support large-scale financial business.

II. Why Avalanche Became a New Foundation for Financial Institutions

For a long time, financial institutions have had a core question about blockchain: should they choose a fully closed consortium chain ecosystem, or an open public chain ecosystem? The biggest advantage of consortium chains is that nodes are controllable, data is private, and security is high—so banks and securities institutions have long favored them.

But as the blockchain industry has developed, people have gradually realized that the real driving force for innovation comes more from open ecosystems. Whether it’s smart contracts, stablecoins, DeFi, or RWA applications, nearly all major innovations first emerge in the EVM ecosystem rather than in closed consortium chains.

Avalanche’s dedicated Layer1 in recent years provides financial institutions with an approach that balances openness and compliance.

On the one hand, each institution can have its own independent network, customizing validation nodes, Gas mechanisms, and permission management to meet regulatory requirements for KYC, data isolation, and business compliance.

On the other hand, it is also compatible with the EVM ecosystem, enabling interoperability with a large number of mature global development tools, smart contracts, and applications.

This means financial institutions can preserve traditional finance’s requirements for security and control, while also benefiting from the innovation capabilities and network effects brought by open ecosystems.

Globally, this is also becoming a direction for more and more large financial institutions. Compared with the past, when each institution built its own closed consortium chains, more organizations now hope to build a new generation of financial networks that can interconnect.

Because in the future, what will truly have value is not an isolated blockchain, but open infrastructure that connects banks, securities firms, exchanges, asset management institutions, and more financial products.

Progmat’s migration in fact reflects the global trend of financial digitalization.

III. RWA Competition Escalates: Japan Takes the Lead Toward the Era of Financial Infrastructure

If this migration is just about upgrading the securities token platform, then Progmat’s next announced plan reveals Japan’s broader strategic layout.

In May this year, Progmat jointly established a Japan Government Bond Tokenization and On-Chain Repo (Repo) working group with banks, securities firms, and asset management institutions. The goal is to explore new models such as putting Japan government bonds on-chain, 7×24-hour trading, and T+0 real-time settlement.

This means Japan has started trying to move its most core financial assets onto blockchain networks.

Government bonds are known as the most important foundational asset in modern financial markets. They are not only investment products, but are also widely used in bank liquidity management, collateralized financing, and repo transactions. If government bonds can be tokenized in the future, the efficiency of the entire capital market’s operations could change.

Traditional bond markets are constrained by trading hours, while on-chain assets can be traded around the clock. Traditional securities settlement usually requires a certain settlement cycle, whereas on-chain smart contracts can achieve real-time delivery-versus-payment, greatly reducing capital lockup and trading risks.

At the same time, processes such as issuance, registration, custody, and clearing of assets can also be automatically completed through smart contracts, reducing large amounts of manual work and improving the efficiency of the entire financial system.

In fact, tokenized securities are only the first step in the development of RWA. In the future, real-world assets such as real estate, fund shares, corporate bonds, private equity, and even more could be issued, traded, and managed using unified on-chain infrastructure.

In recent years, international large financial institutions including BlackRock, JPMorgan Chase, and Goldman Sachs have been actively推进相关布局, and more and more countries around the world have begun to improve regulatory frameworks for tokenized assets.

Japan’s move to upgrade its tokenized securities platform first and explore government bond tokenization likely aims to secure a leading position in the future global RWA competition.

Conclusion

Progmat completes the migration of $2.7 billion in assets. Although it appears to be only a technical upgrade, it actually reflects a fundamental shift in how traditional finance positions blockchain. Blockchain is evolving from serving as infrastructure for encrypted assets, toward becoming a new type of financial infrastructure for real-world assets such as securities and bonds.

As more financial institutions join the RWA track, the focus of industry competition in the future will no longer be who has a higher-performance public chain, but who can truly become the next-generation underlying infrastructure for the global financial market. Japan’s step this time may be only the beginning of the global financial system moving fully on-chain.