MUFG Participates in Digital Securities Financing Through Progmat; Reasons Explained
Progmat Expands Beyond Japan with New Funding and Strategic Partnerships
Progmat, a digital securities platform founded by MUFG, is embarking on an expansion strategy aimed at tokenizing real estate assets beyond Japan's borders. The platform, which leverages blockchain technology to manage a ledger, is poised to offer fractional ownership of foreign properties to both retail and institutional investors.
MUFG's trust banking arm plays a crucial role in this endeavour, structuring and distributing tokenized real estate securities to democratize access and increase liquidity in traditionally illiquid markets.
The new funding round for Progmat features three new investors: Nochun Trust and Banking, Aozora Bank, and real estate firm Kenedix. Kenedix, one of Japan's largest real estate asset managers, has already collaborated closely with MUFG and Progmat on the Osaka skyscraper tokenization project.
Nochun Trust and Banking, with its focus on assets from the agriculture, forestry, and fishery sectors, could potentially expand the range of tokenized assets on the Progmat platform. Aozora Bank, with its experience in bond issuance and LBO finance, brings additional capital and credibility to the table.
The focus on foreign real estate tokenization suggests that Progmat is navigating regulatory complexities in Japan by targeting global markets, though specific foreign markets involved have not been publicly disclosed. The use of blockchain technology aims to streamline compliance, settlement, and ownership verification processes, reducing costs and transaction times significantly compared to traditional methods.
From a broader perspective, Progmat supports MUFG’s commitment to fintech innovation and digital securities, positioning MUFG as a leader in Japan’s digital asset sector and encouraging other financial institutions to follow suit.
The participation of these financial entities fits into a wider pattern where institutional investors support the development of regulated digital securities platforms, facilitating growth beyond domestic borders and helping navigate complex legal frameworks.
In addition, Progmat is working on stablecoins for cross-border payments with the big three Japanese banks. The platform's current shareholders are mainly trust banks, with five banks in total. Progmat Coin acts as a stablecoin issuance platform, with reserves held by one of the associated trust banks.
Plans for future shareholdings in Progmat include securities firms. Notably, SBI is represented by SBI PTS, the company that owns the Osaka Digital Exchange (ODX), rather than SBI Securities. Progmat is the largest Japanese digital securities issuance platform.
The current shareholding in Progmat has been diluted, with MUFG's shareholding decreasing from 49% to 42% due to the new funding. Progmat CEO, Tatsuya Saito, explained the founding of Progmat as an innovative startup within a bank in a blog post. Kenedix plans to launch a mobile app dedicated to security tokens and offer its investors utility tokens and stablecoins.
Progmat deliberately chose the vivid blue color to contrast with MUFG's red, signalling its independence and innovative spirit within the MUFG group.
[1] Progmat's Expansion Strategy: Tokenizing Real Estate Assets Beyond Japan (link)
[2] Progmat Announces New Funding Round with Three New Investors (link)
[3] Progmat and Kenedix Collaborate on Osaka Skyscraper Tokenization Project (link)
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