Establishment of Progmat as National Digital Asset Market Infrastructure

Mitsubishi UFJ Trust and Banking, Mizuho Trust & Banking, Sumitomo Mitsui Trust Bank, Sumitomo Mitsui Financial Group, SBI PTS Holdings, JPX Market Innovation & Research, NTT DATA Japan, and Datachain have reached agreement on the shareholder agreement for the establishment of Progmat as an entity.

Progmat is responsible for the development of the namesake issuance and management platform for a range of digital assets, and the management of the Digital Asset Co-Creation Consortium (“DCC”), which has 214 member companies.

Through this alliance, the eight partner companies will smoothly implement “co-creation areas” with “standardized format” and realize an overwhelming improvement in convenience for market participants, thereby enhancing the development and competitiveness of the digital asset market in Japan.

Background

In Japan, the foundations of the digital asset market are steadily being laid, with the “Security Token” (“ST”) regulation under the revised Financial Instruments and Exchange Act effective in 2020 and the “Stablecoin” (“SC”) regulation under the revised Payments Services Act effective 2023. Also, ST-related projects have issued more than JPY 120bn.

In response to this trend, Mitsubishi UFJ Trust and Banking has been developing the “Progmat ST” platform for ST, “Progmat UT” platform for “Utility Token” (“UT”), “Progmat Coin” platform for SC, and the “Token Manager” and “Token Wallet” wallet services for digital assets.

For the digital asset market to expand more fully, it is essential that it offers overwhelmingly greater convenience than existing traditional securities markets, settlement markets, and the like. “Co-creation” among network participants is the key to achieving this overwhelming level of convenience. To work together beyond the group, the partners have decided to place a more neutral “joint entity” at the core, rather than a Mitsubishi UFJ Trust subsidiary.

In addition, to construct a “common infrastructure” for the digital asset market, it is ideal for a single organization to have both deep domain knowledge of the financial market as well as overwhelming infrastructure construction capabilities.

Instead of the conventional situation where a financial institution acts as the client and a software company performs contracted development, both parties have decided to join hands to create a “joint venture,” aiming to create a development group that can make an impact more quickly and more broadly.

Future plans

At the general shareholders’ meeting to be held on the same day of the company’s establishment, a resolution will be passed to elect directors of Progmat and announce the management structure of the company, including outside directors.

The corporate website will be renewed at the same time, and all content that was previously shared exclusively with the “Digital Asset Co-Creation Consortium” members will be made public in principle, and other related information will be provided.

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