MUFG disburses funds through Progmat's digital securities; reasons explained
Japan's Progmat Digital Securities Platform Expands Globally with New Investors
Progmat, the leading digital securities issuance platform in Japan, has announced a new funding round with three new investors: Nochun Trust and Banking, Aozora Bank, and real estate firm Kenedix. This round of investment marks a significant step in Progmat's global expansion plans.
Founded by Mitsubishi UFJ Financial Group (MUFG), Progmat has been leveraging blockchain technology to tokenize real estate assets, enabling fractional ownership of traditionally large and illiquid assets. This innovative approach allows both institutional and retail investors to participate through digital tokens representing shares of the real estate.
The new investors bring valuable expertise to Progmat. Nochun Trust Bank is looking to use tokenization to expand the market for certain assets previously only available to institutional investors, with plans to tokenize commodities from the agriculture, forestry, and fishery sectors. Aozora Bank, with its experience in bond issuance and LBO finance, will contribute to Progmat's growth and development. Kenedix, another new investor, is one of Japan's largest real estate asset managers and has already been involved in several tokenized real estate issuances.
With these new investments, MUFG's shareholding in Progmat has been diluted from 49% to 42%. Other shareholders were also diluted, including SMBC, Mizuho, and Sumitomo Mitsui Trust, which each previously held 7.5% and now own just under 6.5%.
Progmat's initial shareholders were five banks that are mainly trust banks, with the choice of vivid blue color to distinguish it from MUFG's red. The platform is the largest Japanese digital securities issuance platform, with its primary competitor being the iBet for Fin platform, part of Nomura-founded BOOSTRY.
Progmat's strategies appear to be successful so far. The platform streamlines processes such as compliance, settlement, custody, and ownership verification by utilizing blockchain, which reduces costs and transaction times compared to traditional real estate investment methods. This technology also enhances liquidity and accessibility, addressing barriers like high minimum investments and limited market transparency.
Collaboration with real estate firms like Kenedix for property management and embedding regulatory compliance within Progmat’s infrastructure also help foster investor confidence. Progmat's ambition is not limited to Japan, as it aims to expand beyond its borders by tokenizing foreign real estate.
In September 2024, Progmat announced plans to work with the big three Japanese banks on stablecoins for cross-border payments. The platform also acts as a stablecoin issuance platform with reserves held by one of the associated trust banks.
Currently, Progmat's shareholding is neutral, with no securities firms investing so far, but plans exist to include securities firms in the future. Progmat CEO, Tatsuya Saito, explained in a blog post (in Japanese) that the foundation of Progmat was suggested as a survival strategy, emphasizing its role in automating ledgers using blockchain.
Jun Shinozaki of Aozora Bank believes that Progmat's global development efforts will contribute greatly to the development of the digital asset market. Progmat's CEO, Tatsuya Saito, shared insights about founding an innovative startup within a bank in his blog post, which may be useful for anyone attempting similar endeavors.
This positions Progmat as a pioneering platform in digital securities and real estate tokenization, with ambitions to set new standards both in Japan and globally.
- Progmat, the digital securities issuance platform in Japan, aims to tokenize foreign real estate, expanding beyond its borders.
- Nochun Trust Bank plans to use tokenization to expand the market for commodities from the agriculture, forestry, and fishery sectors.
- Aozora Bank's experience in bond issuance and LBO finance will contribute to Progmat's growth and development.
- Progmat is engaging in stablecoin initiatives for cross-border payments, working with the big three Japanese banks.
- Progmat's CEO, Tatsuya Saito, shared insights about founding an innovative startup within a bank in his blog post, which may be valuable for those attempting similar ventures in the field of finance and technology.
