MUFG Participates in Digital Securities Funding via Progmat; Reasons Explained
In a significant move for the Japanese digital asset market, Progmat, a leading digital securities issuance platform, has secured new investments from Nochun Trust and Banking, Aozora Bank, and real estate firm Kenedix.
Progmat, founded by Tatsuya Saito, has already been involved in several tokenized real estate issuances, using both the Progmat and BOOSTRY platforms. The platform aims to expand beyond Japan, as stated by Saito.
The new investors are set to expand the range of tokenized assets on the Progmat digital securities platform. Their strategy focuses on partnering with MUFG Bank to tokenize high-value real estate assets, starting with the landmark Osaka skyscraper, valued at $681 million. These assets will be converted into blockchain-based private REITs (real estate investment trusts) and fractionalized digital tokens, enabling broader investor participation.
The partnership aims to democratize real estate investment access on the platform, targeting both institutional investors, such as large life insurance companies via private REITs, and retail investors through token purchases. Progmat’s blockchain infrastructure will streamline compliance, ownership verification, and settlement processes, reducing transaction costs and durations compared to traditional methods.
Kenedix will manage the properties, while Aozora Bank and Nochun Trust and Banking collaborate within this ecosystem to broaden asset types available on Progmat, facilitating a wider adoption of tokenized real estate investments. The collaborative approach could potentially open up foreign real estate assets in the future.
It's worth noting that Progmat's foundation is rooted in the essential role of a trust bank to manage a ledger, which is automated using blockchain. Progmat Coin acts as a stablecoin issuance platform, with reserves held by one of the associated trust banks.
The latest funding round resulted in MUFG's shareholding in Progmat being diluted from 49% to 42%. Other shareholders, including SMBC, Mizuho, and Sumitomo Mitsui Trust, were also diluted, each owning just under 6.5% (previously 7.5%). Progmat is the largest Japanese digital securities issuance platform, with its primary competitor being the 'iBet for Fin' platform, part of Nomura-founded BOOSTRY.
Interestingly, Progmat did not court venture capital firms as investors, given its likelihood to take time to reach scale and the motivations behind it. Tatsuya Saito shared insights about founding an innovative startup within a bank in a blog post (in Japanese).
[1] Progmat Press Release [2] Nochun Trust and Banking Press Release [3] Kenedix Press Release [4] Aozora Bank Press Release [5] MUFG Press Release
- The new investors, Nochun Trust and Banking, Aozora Bank, and real estate firm Kenedix, will expand the range of tokenized assets on Progmat's digital securities platform, with a strategy focusing on partnering with MUFG Bank to tokenize high-value real estate assets.
- Progmat's blockchain infrastructure will streamline compliance, ownership verification, and settlement processes, reducing transaction costs and durations compared to traditional methods.
- The partnership aims to democratize real estate investment access on the platform, targeting both institutional investors such as large life insurance companies via private REITs, and retail investors through token purchases.
- The collaborative approach between Kenedix, Aozora Bank, and Nochun Trust and Banking could potentially open up foreign real estate assets in the future.
- Progmat Coin acts as a stablecoin issuance platform, with reserves held by one of the associated trust banks.
