Japan's FSA, Finance Ministry and Bank of Japan Plan Blockchain Settlement Network for Stocks and Government Bonds
Japan’s FSA, Finance Ministry and Bank of Japan Plan Blockchain Settlement Network for Stocks and Government Bonds #
Japan’s top financial regulators and the central bank are working together to explore a national blockchain settlement system for equities and government bonds, Nikkei reported Wednesday.
The Financial Services Agency, the Ministry of Finance, and the Bank of Japan, along with major financial institutions, are expected to form a study group this summer. The group would deliver a development blueprint by early 2027. If formally approved, a live system could be operational in the early 2030s, according to the report.
Japan’s equity market currently runs on a T+2 settlement cycle, meaning cash changes hands two business days after a trade executes. Japanese government bond transactions settle in one day. The proposed blockchain infrastructure would support real-time, around-the-clock settlement for both asset classes, which proponents say would free up capital faster and reduce counterparty risk.
The Nikkei report said the development plan will need to resolve three design questions: which blockchain architecture to use, how to divide responsibilities among public agencies and private institutions, and what the implementation roadmap will look like. The system could eventually be extended to international remittance flows.
Japan’s private sector has moved ahead independently. Progmat, a blockchain infrastructure firm with close ties to the country’s megabanks, recently migrated approximately ¥452 billion in tokenized securities to a dedicated Avalanche network. SBI Holdings and Startale are co-developing Strium, a blockchain built for round-the-clock tokenized securities trading, with a public test network expected later this year.
Authorities drew a distinction between the proposed market infrastructure and Japan’s separate central bank digital currency research. The Bank of Japan continues technical work on a retail digital yen, but the government has not committed to issuing one, and the two efforts are expected to remain independent.
Other major markets are also pursuing distributed ledger technology for post-trade infrastructure. The U.S. DTCC has processed more than $330 billion in tokenized Treasury transactions, and several European jurisdictions are running government bond settlement pilots on blockchain. Japan has one of the world’s largest bond markets.
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