Mitsubishi UFJ Financial Group (MUFG) plans to use blockchain technology to offer faster settlement of Japanese government bond (JGB) transactions, in a move reminiscent of similar initiatives by banks in other countries.
MUFG is preparing a proof-of-concept for onchain JGB transactions using the Canton network to expedite the settlement, which typically takes 1-3 days by traditional means.
The Tokyo-based bank expects to improve the operational and capital efficiency of repo transactions — the purchase of securities as a form of short-term borrowing and lending — through real-time 24/7 onchain settlement.
MUFG noted that financial institutions in Europe and the U.S. have expanded proof-of-concept projects to achieve this exact goal. Blockchain-based intraday U.S. Treasury-bond repos have existed for several years through JPMorgan’s Kinexys network, which went live in 2020.
“Given their high credit worthiness and liquidity,…
