[NEWS] Mitsubishi UFJ Trust and Banking Corporation and NTT Data partner to build standard infrastructure for digital corporate bonds

Mitsubishi UFJ Trust and Banking Corporation and NTT Data announced on the 10th that they have agreed to partner and link Progma, an issuance and management platform for digital assets in general, with NTT Data Group's corporate bond management platform to build a "standardized infrastructure" for digital corporate bonds.

In addition, Mitsubishi UFJ Bank will collaborate with the two companies to begin supporting the issuance of digital corporate bonds using the infrastructure.

In a statement, Mitsubishi UFJ Trust and Banking Corporation said that currently, a total of 95.6 billion yen in security tokens (publicly offered digital securities) have been created in Japan, of which 13 have used Progma.

In addition, the assets under management (AuM) of this amount to approximately 80.7 billion yen, a share of 84%, but most of this is asset-backed digital securities targeting real estate and other assets, and the issuance of digital corporate bonds is still in the experimental stage.

He said that in order to further expand digital bonds, which use blockchain to enable issuers, bondholders, financial agents, ledger managers and other related parties to share and manage information on a common platform, it is important to improve convenience by reducing the number of units, improving efficiency, reducing costs, and reducing the environmental impact.

He also explained that it is necessary to minimize the burden required for implementation and migration and to expand the base of market participants and handling financial institutions.

Against this background, in order to further popularize digital corporate bonds, NTT DATA Group, which boasts a 95% share of the market for systems for entrusted financial institutions in corporate bonds (book-entry bonds) in Japan, and PROGMA, and MUFG Bank, which has a track record of accepting many book-entry bonds, will work together to make it easier for financial institutions and business companies to enter the digital corporate bond market and revitalize the digital corporate bond market.

In this agreement, the following items were considered to formulate the optimal product model and business process that should be the industry-wide standard, and to build a standardized infrastructure, based on the premise of collaboration between DBM, a function for digital bond management of B-Apps Online, which has a high market share in traditional corporate bonds, and Progma, which has a rich track record of issuing security tokens.

• Standardization of the business overview of digital corporate bonds
• Standard product model for digital corporate bonds
• Evaluation of the sufficiency of the corporate bond administrator business flow and the digital corporate bond management platform "DBM (provisional)" based on Progma
• Consideration of the main interface specifications between Progma and DBM and implementation of PoC (proof of concept)

In the future, commercial versions of Progma and DBM will be implemented, and a partnership system will be established for those who wish to use it among the 20 entrusted financial institutions that have introduced NTT DATA's transferable corporate bond system. The NTT DATA Group will consider further expansion of its partners in order to contribute to the development of the digital corporate bond market.

Mitsubishi UFJ Trust and Banking Corporation will also take the initiative in using the platform, aiming to issue digital bonds with Mitsubishi UFJ Bank as the trustee within fiscal 2023.

Reference: Announcement
Image: Cited from Mitsubishi UFJ Trust and Banking Corporation announcement