Japan is preparing real-time blockchain settlement for stocks and government bonds, the business daily Nikkei reported. A joint study group of the FSA, the Ministry of Finance and the Bank of Japan starts work this summer.
Settlement describes the step after a trade closes, when the security and the money actually change hands. In Tokyo that takes two trading days for stocks and one for Japanese government bonds. Until then the transaction stays open, so both sides carry counterparty risk. Meanwhile, the open position ties up capital that frees up only after settlement. A shared blockchain infrastructure would cut this waiting time to near real time. Moreover, private financial institutions are taking part alongside the three authorities. However, the group expects a development plan in early 2027 at the earliest. With formal approval, operations could begin within a few years. That would put the finished system in the early 2030s.
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Study group to design Japan's blockchain settlement for securities
First, the study group has to clarify what such an infrastructure would even look like. Its members are the FSA as the financial regulator and the Ministry of Finance as the issuer of government bonds. The Bank of Japan belongs to the group as well. Supervision, issuance and monetary policy thus sit at one table. Institutions from the market also take part. The development plan will set the design of the blockchain and divide the tasks between authorities and institutions. In addition, it covers a roadmap for the further work.
An immediate system change is therefore not imminent, because the actual build starts only after formal approval. Later, the system could also cover international transfers. How far that step reaches remains open at this stage. The long lead time separates the project from the pilots at Japanese banks, which are already in testing. Until then, today's deadlines of two and one trading day stay in place.
The starting point is comparatively long settlement periods. They tie up collateral and liquidity overnight. Real-time settlement would largely dissolve that buffer, because the security and the payment would be available at the same moment. As a result, counterparty risk in trading falls. For banks, this also frees up capital. Their liquidity management shifts as well, because money and securities would have to stand ready at any time. These follow-on questions are exactly what the study group now has to work through.
JSCC already tests government bonds as digital collateral
In contrast, a pilot running since April 2026 is more concrete. The Japan Securities Clearing Corporation (JSCC) is the central counterparty in Japanese securities trading. In clearing it stands between buyer and seller and guarantees that both sides meet their obligations. For that it requires pledged assets, known in the trade as collateral. It now tests Japanese government bonds as digital collateral. Mizuho Financial Group, Nomura Holdings and Digital Asset Holdings take part as well. The test runs on the Canton Network. Previously, in February 2026, the FSA had added the project to its Payment Innovation Project.
The proof of concept covers collateral transfers in real time as well as cross-border settlement. Participants additionally check legal compliance under Japan's Book-Entry Transfer Act and the Financial Instruments and Exchange Act. The test phase runs until September 2026. According to those involved, the effort responds to comparable infrastructure tests abroad, above all in the United States. Collateral management for government bonds therefore counts as an urgent priority for them.
The market behind it is large. Japan's outstanding government bonds and bills add up to around 1,166 trillion yen, roughly USD 7 trillion. At the same time, the yield on ten-year JGBs sits near a multi-decade high at about 2.9%. Thirty-year paper yields more than 4%. Since yields are rising, the market value of existing bonds falls. So anyone posting them as collateral must top up more often. Efficient collateral management gains weight in this environment.
Crypto assets move into Japanese securities law
Japan is also shifting the legal framework for cryptocurrencies. Parliament passed an amendment to the Financial Instruments and Exchange Act in July 2026. Originally, cryptocurrencies in Japan fell under the Payment Services Act, which mainly governs payments. In future, the same rulebook applies as for stocks and bonds. The new rules cover the crypto assets listed on registered Japanese exchanges, among them Bitcoin and Ether. However, the reclassification takes effect only in fiscal year 2027.
For investors, the tax burden changes most. From the start of 2028, a rate of 20% is due to apply, compared with up to 55% before. The amendment also clears the way for regulated crypto ETFs in Japan. Yet an approval date remains open.
The regulator has likewise adjusted its own organization. In early August 2026, a standalone Cryptocurrency and Stablecoin Division began work. It sits in the FSA's Asset Management and Insurance Supervision Bureau and splits into three offices. They handle crypto monitoring, innovation promotion and the planning of digital payments. Overall, the authority bundles supervision and rulemaking for the sector in one place.
Megabanks develop a joint yen stablecoin in parallel
On the payments side, Japan's megabanks are building a project of their own. Mizuho Bank, MUFG and SMBC have run a pilot for a joint stablecoin under FSA supervision since November 2025. Such tokens stay pegged to a currency. Mitsubishi Corporation also takes part, along with Progmat, the blockchain platform that MUFG and NTT Data built. The consortium wants to issue the token by the end of fiscal year 2026, pegged to the yen at first. A dollar version is to follow later.
Under the name Project Pax, the consortium targets a transaction volume of 1 trillion yen by 2028. That target refers to payments between companies. Notably, the overlap among the participants stands out. Mizuho sits on two blockchain tracks at once, the government bond test and the stablecoin pilot. Nomura also takes part in the JSCC project. So the circle of institutions building Japan's blockchain infrastructure stays small.
Outside the megabanks, the tokenization of deposits continues. Here a blockchain token represents the balance in a bank account. Several dozen companies support the deposit token DCJPY from DeCurret DCP. Furthermore, Japan Post Bank plans to tokenize savings deposits in fiscal year 2026. SBI Shinsei Bank is examining a DCJPY issuance through Partior, a joint venture with JPMorgan participation. Japan's blockchain infrastructure is ultimately emerging through several channels at once, while the study group is only starting its work.
