Japan's digital securities infrastructure provider Progmat has completed the migration of ¥452 billion in assets to a dedicated Avalanche Layer 1 network. Dubbed Project Keystone, the strategic upgrade aims to eliminate reliance on a single blockchain while delivering higher efficiency for regulated digital asset issuance and trading.
Architectural Shift: Mediator Layer and EVM Compatibility
As part of the transition, Progmat introduced a mediator layer between applications and the blockchain, enabling future connectivity to multiple distributed ledgers without altering existing models for security token issuance, ownership, or transfer. The dedicated Avalanche Layer 1 implementation ensures compliance with regulatory requirements for financial products while operating separately from public retail trading environments.
The upgrade also brings Ethereum Virtual Machine (EVM) compatibility, allowing developers to use Ethereum-based tools. Progmat migrated its smart contracts from Java-based Corda code to Solidity, streamlining integration for those familiar with the Ethereum ecosystem. The company reported that rights transfer processing is now 3 to 5 times faster, with Avalanche achieving transaction finality in under two seconds—a marked improvement over the previous Corda infrastructure's multi-second latency.
Minimal Disruption for Issuers, Cross-Chain Settlements on the Horizon
Existing issuers experienced minimal disruption during the switch and retained their product structures. However, Progmat noted that security tokens remain restricted and are not freely accessible through public crypto wallets, despite the new EVM-compatible environment.
Looking ahead, Progmat plans to leverage the new infrastructure for cross-chain settlement services involving security tokens, stablecoins, and tokenized bank deposits. Earlier this year, Datachain announced a partnership with Progmat to develop cross-chain delivery-versus-payment (DvP) and payment-versus-payment (PvP) solutions. Progmat emphasized that such settlement services are essential for regulated financial asset markets seeking seamless cross-blockchain operations.
Technology Stack and Compliance
The network is powered by AvaCloud, which provides both Avalanche infrastructure and ongoing operational support. Progmat stated the system complies with SOC 1 and SOC 2 Type II assurance standards. Ava Labs, the primary developer behind Avalanche, and Progmat have also established a joint response plan to address outages outside standard business hours. Meanwhile, Avalanche's tokenization ecosystem continues to grow: BlackRock's BUIDL fund has reached around $900 million in assets on the network, with total tokenized real-world assets (RWA) on Avalanche approaching $2.10 billion.
Progmat is also involved in research with Metaplanet and JPYC to explore Bitcoin-backed digital credit products. Securitize, a global tokenization firm, recently expanded its tokenized shares offering to Avalanche and Solana.