TOKYO – Progmat, Japan’s largest security token (ST) platform, has completed a significant migration, moving its entire platform and over ¥452 billion (approximately $2.7 billion to $3 billion) in tokenized assets to a dedicated Avalanche Layer 1 (L1) blockchain. This landmark transition, finalized today, July 13, 2026, marks a pivotal moment for institutional adoption of public blockchain technology within regulated financial systems.
The move, executed under “Project Keystone,” aims to significantly enhance speed, interoperability, and regulatory compliance for Japan’s digital financial instruments. Ava Labs and Datachain partnered with Progmat to facilitate this shift, which saw assets previously housed on a private Corda 5 blockchain seamlessly transferred to the public Avalanche network.
Japan’s largest security token platform embraces Avalanche
The migration of Progmat ST, the platform’s core issuance and management system, represents a strategic pivot towards greater efficiency and broader ecosystem integration. Officials claim the transition now allows for rights transfers that are three to five times faster than the previous setup.
Moreover, transaction finality on the Avalanche L1 network is now achieved in under two seconds. Progmat, initially incubated by Mitsubishi UFJ Trust and Banking Corporation (MUFG) before becoming an independent entity in October 2023, maintains a dominant position in Japan’s ST market.
The platform accounts for 64.6% of the national security token market’s total issuance value. It also covers 53.8% of total projects and has handled 45 out of 89 publicly disclosed ST projects in Japan, facilitating more than ¥216.9 billion in tokenized assets to date.
Strategic move for global interoperability and compliance
This shift to Avalanche L1 isn’t just about speed; it’s a fundamental architectural redesign. Progmat detached its underlying architecture from being tied to any specific blockchain, making it easier to evolve into a multi-chain platform as future requirements emerge.
By moving to a public, Ethereum Virtual Machine (EVM)-compatible chain, all security tokens issued through Progmat are now poised for greater composability with the wider public blockchain ecosystem. This positions Japanese digital securities within global liquidity environments, expanding their reach beyond domestic borders. The growing utility of EVM-compatible networks is a key driver for such institutional moves.
Datachain, an existing interoperability partner, will support future security token issuance on non-Avalanche blockchains. They’ll also facilitate delivery versus payment (DvP) or payment versus payment (PvP) settlement using various stablecoins. This expanded capability is crucial for complex financial transactions.
Maintaining regulatory compliance was paramount during this process. The dedicated Avalanche L1 allows Progmat to enforce independent rule sets and governance. This setup is specifically tailored to meet the strict compliance needs of regulated financial entities.
Project Keystone involved the porting of all existing smart contracts to EVM without altering the behavior or specifications of any live project. Financial institutions using the platform continued their operations without disruption, highlighting the meticulous planning behind this complex technical undertaking.
Institutional backing and market implications
Progmat enjoys robust support from some of Japan’s most influential financial institutions. These include Mitsubishi UFJ Financial Group (MUFG), Mizuho Bank, the Tokyo Stock Exchange, and SBI Holdings. This high-level backing underscores the institutional confidence in tokenized assets.
SBI Holdings, in particular, has a broader vision for “onchain finance,” aiming to build a comprehensive ecosystem that leverages blockchain technology. Their involvement with Progmat aligns with their strategy of investing in crypto-related ventures and introducing trust bank-backed stablecoins like JPYSC.
The move by Progmat is a powerful indicator of how established financial players are integrating blockchain into their core operations. It signals a readiness to embrace digital assets not just as an experimental fringe but as a foundational element of future finance. This trend is gaining traction as more traditional institutions explore blockchain solutions.
Japan’s digital securities market is projected to expand significantly, with forecasts suggesting it will exceed ¥1.05 trillion (over $7 billion) by the end of 2026. This growth trajectory, coupled with Progmat’s strategic upgrade, positions Japan as a leader in the global tokenization landscape.
What’s next for Japan’s tokenized assets?
The successful migration paves the way for further innovation in Japan’s digital finance sector. Progmat already launched a Tokenized Government Bonds & On-Chain Repo Working Group in May, bringing together asset managers, banks, and securities firms.
This group is actively studying the potential impact of 24/7 trading and same-day (T+0) settlement for Japanese Government Bonds (JGBs). Such advancements could revolutionize traditional bond markets by increasing liquidity and reducing settlement times.
Progmat’s move to Avalanche L1, capable of supporting institutional-grade throughput, is designed to accommodate the anticipated growth of digital finance. It sets a new technical standard, building scalable public blockchain rails for what many are calling the “trillion-yen era of digital finance.” This commitment to scalability is critical for handling large volumes of tokenized assets.
The development also opens doors for broader global participation and easier integration with other blockchain platforms. As the world moves towards a more interconnected financial system, Progmat’s updated architecture ensures Japan remains at the forefront of this evolution, ready to engage with international digital asset markets.