Progmat, Japan’s largest security token platform, has completed its migration to an Avalanche Layer1 network, moving more than 452 billion yen, or about $2.7 billion, in tokenized securities assets on-chain.
The move goes beyond a routine technical upgrade. In the context of Japan’s security token market, it signals a broader shift in financial infrastructure as traditional institutions move core operations onto a more open, higher-performance blockchain network.
Progmat’s move marks a new phase for Japan’s security token market
Progmat is not a typical blockchain company. It is one of the most important pieces of infrastructure in Japan’s security token market. The platform was originally incubated by Mitsubishi UFJ Trust Bank, or MUFG, and began operating independently in 2023.
It is backed by a group of Japanese financial institutions that includes Mizuho Bank, the Tokyo Stock Exchange and SBI. According to the source material, Progmat holds 53% of Japan’s security token market and accounts for 64.6% of total security token issuance, covering asset classes such as real estate and corporate bonds. Much of Japan’s tokenized securities market runs on this system.
The key part of the migration is the change in architecture. Progmat abandoned its earlier permissioned-chain setup built on Corda 5 and adopted an Avalanche-dedicated Layer1 as its new base layer.
For years, Corda was widely used by banks around the world as a consortium-chain solution. Its strengths included privacy protection, fine-grained permission controls and a structure that was easier to align with regulatory requirements, making it a common choice for early blockchain pilots in finance.
As the scale of tokenized securities has grown, though, the limits of that model have become harder to ignore. A closed ecosystem makes it difficult for assets to interact with other blockchain networks. Building new applications often requires repeated development spending, and institutions have limited access to the innovation emerging across the wider Web3 ecosystem.
That is why this migration looks like more than a simple infrastructure swap. It represents a change in technical direction. After moving smart contracts into an EVM environment, Progmat kept its existing business logic intact, while increasing asset-rights transfer speed by 3 to 5 times and reducing final confirmation time to less than two seconds. The new setup is also designed to support connections with more blockchain networks over time, opening the way for a multi-chain architecture.
The report says the migration did not disrupt normal operations for any participating financial institution, a point that suggests blockchain infrastructure is now capable of supporting large-scale financial activity.
Why Avalanche is emerging as a base layer for financial institutions
Financial institutions have long faced a basic choice in blockchain strategy: stay with fully closed consortium chains or connect to an open public-chain ecosystem.
Consortium chains offer controlled validator participation, private data handling and strong security controls. Those features have kept them attractive to banks and securities firms. But as the sector has matured, open ecosystems have shown where most product and infrastructure innovation actually happens. Smart contracts, stablecoins, decentralized finance and RWA applications largely first took shape in the EVM ecosystem rather than in closed enterprise networks.
Avalanche’s dedicated Layer1 model gives institutions a structure that combines regulatory control with access to a broader technology stack.
Each institution can run its own independent network and customize validator design, gas mechanisms and permission management. That supports compliance requirements tied to KYC, data segregation and business controls. At the same time, compatibility with the EVM ecosystem allows connectivity with a large base of development tools, smart contracts and applications already in use globally.
That combination lets financial firms preserve the security and controllability they expect from traditional market infrastructure while tapping into the innovation capacity and network effects of a more open environment.
Viewed globally, the report argues that this is the direction more large institutions are taking. Instead of building isolated consortium chains, firms are increasingly looking for interoperable financial networks. What matters in that model is not an isolated blockchain operating on its own, but an open infrastructure layer that can connect banks, securities companies, exchanges, asset managers and a wider range of financial products.
Progmat’s migration reflects that broader direction in financial digitization.
Japan is pushing tokenization toward core market infrastructure
If the migration itself represents an upgrade to a security token platform, Progmat’s next step points to a larger plan in Japan.
In May, Progmat joined banks, securities firms and asset management institutions to form a working group on tokenized Japanese government bonds and on-chain repo. The group aims to explore models that include putting Japanese government bonds on-chain, enabling 24/7 trading and introducing T+0 real-time settlement.
That suggests Japan has started testing how far blockchain can be used for the most important financial assets in the market.
Government bonds are one of the foundational assets of modern finance. They are not only investment products but also tools widely used in bank liquidity management, collateralized financing and repo transactions. If government bonds can eventually be tokenized, the operating efficiency of capital markets could change with them.
Traditional bond markets are restricted by trading hours, while on-chain assets can trade around the clock. Conventional securities settlement usually requires a clearing cycle, while smart contracts can handle delivery and settlement in real time, reducing capital lock-up and transaction risk.
Issuance, registration, custody and clearing can also be handled through smart contracts, cutting manual processes and improving the efficiency of the broader financial system.
More broadly, the report describes security tokenization as only the first step in RWA development. In time, real estate, fund shares, corporate bonds, private equity and other real-world assets could be issued, traded and managed on a common on-chain infrastructure.
The report also notes that major global institutions including BlackRock, JPMorgan and Goldman Sachs have been advancing related initiatives, while more jurisdictions are working on regulatory frameworks for tokenized assets.
Against that backdrop, Japan’s decision to upgrade a major security token platform and explore tokenized government bonds points to an effort to secure an early lead in the global RWA race.
From crypto rails to financial infrastructure
Progmat’s $2.7 billion migration may look like a technical update on the surface, but the report frames it as evidence of a deeper change in how traditional finance views blockchain. The technology is moving beyond infrastructure built mainly for crypto assets and toward a role as a new base layer for securities, bonds and other real-world financial assets.
As more institutions enter the RWA sector, competition may shift away from which public chain offers the highest performance and toward which platform can become foundational infrastructure for the next generation of global capital markets. In that sense, Japan’s latest step may be an early sign of a much broader move toward on-chain finance.