MUFG reduced its investment in Progmat's digital securities funding; reasons explained.
Progmat, Japan's digital securities platform, has announced a significant funding round with three new investors: Nochun Trust and Banking, Aozora Bank, and real estate firm Kenedix. This investment marks a key step in Progmat's journey, as the company continues to expand its offerings and explore new opportunities.
One of the most intriguing aspects of Progmat is its stablecoin issuance platform, Progmat Coin. These stablecoins are backed by reserves held by one of the associated trust banks, offering certainty around the timing of payments and the ability to use smart contracts for automation. They are also well-suited for the settlement of digital securities.
The new investors could potentially expand the range of tokenized assets on the Progmat platform. For instance, Nochun, which is owned by Norinchukin Bank, Japan's largest institutional investor, is eyeing the tokenization of commodities from the agriculture, forestry, and fishery sectors. Kenedix, one of Japan's largest real estate asset managers, plans to launch a mobile app dedicated to security tokens and offer its investors utility tokens and stablecoins.
The funding round has diluted MUFG's shareholding in Progmat from 49% to 42%. Despite this change, MUFG still holds significant influence and benefits from Progmat’s operations, as the essential role of a trust bank is to manage a ledger, which is automated using blockchain. The foundation of Progmat was suggested as a survival strategy, given the automated nature of a trust bank's core functions.
Progmat's CEO, Tatsuya Saito, shared insights about founding Progmat within a bank in a blog post (in Japanese). Saito's strategies, as described, may be useful for anyone trying to push innovation from within a bank.
Looking beyond Japan, Progmat harbors ambitions to expand internationally by targeting foreign real estate tokenization. The company aims to offer fractional ownership opportunities to retail investors across borders, navigating regulatory complexities to facilitate investment in overseas properties through partnerships with foreign developers or asset managers. This strategy positions Progmat as a platform to democratize access and liquidity in global real estate markets.
Jun Shinozaki of Aozora Bank believes that Progmat's efforts to develop 'national infrastructure' not only domestically but also globally, will contribute greatly to the development of the digital asset market. With its new investors and international ambitions, Progmat is poised to revolutionize the digital securities landscape, both in Japan and beyond.
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