Japan eyes 24/7 blockchain settlement for stocks, JGBs

Japan is preparing to study a blockchain settlement system capable of processing stock and government bond transactions around the clock, according to an Aug. 26 report from Nikkei.

The Financial Services Agency, Ministry of Finance, Bank of Japan and participating financial institutions are expected to establish a study group during summer 2026. The group would aim to complete an initial development plan in early 2027.

None of the three government institutions had published a formal announcement confirming the reported study group when checked Wednesday.

Japan’s blockchain settlement plan targets existing delays

Japanese stock transactions currently use a T+2 settlement cycle, meaning cash settlement occurs two business days after a trade. Japanese government bond transactions generally settle on the following business day.

The proposed blockchain infrastructure would connect the securities transfer and corresponding cash payment more closely. Investors could gain access to sale proceeds faster and potentially reinvest the funds almost immediately.

A development plan is expected to examine the blockchain architecture, responsibilities assigned to public and private participants and the system’s implementation timetable. International remittances could eventually become another use case.

The infrastructure “could” become operational in the early 2030s if the plan receives formal approval, according to Nikkei. No final implementation decision has been announced.

Real-time settlement can reduce the period during which counterparties remain exposed to each other. However, removing settlement delays also reduces the time available to secure cash or securities, creating new liquidity and operational requirements for market participants.

BOJ is already testing central-bank money on blockchain

The reported initiative builds on existing Bank of Japan experiments. Governor Kazuo Ueda said in March that the central bank was testing settlements using commercial banks’ current account deposits on blockchain infrastructure.

The sandbox project is examining how blockchain networks could connect with existing systems. Its potential use cases include domestic interbank transfers and securities settlement.

BOJ Executive Director Kazushige Kamiyama later described the work as an examination of tokenized central-bank account deposits, sometimes called wholesale central bank digital currency. The design could support delivery-versus-payment settlement, where securities and cash move simultaneously.

This work remains separate from Japan’s retail digital-yen pilot. The BOJ continues technical research on a retail central bank digital currency, but the government has not decided whether to issue one.

Tokenized securities already operate in Japan

Japan’s private financial sector has already developed blockchain platforms for regulated securities. Progmat recently migrated ¥452 billion in managed tokenized securities to a dedicated Avalanche network.

SBI Holdings and Startale are also building Strium, a blockchain designed for round-the-clock tokenized securities trading. A public test network is planned for 2026.

These private systems demonstrate the issuance and transfer of tokenized assets. The government proposal is broader because it could involve the infrastructure supporting mainstream Japanese stocks, government debt and central-bank money.

Japan’s three largest banks are separately preparing a shared yen stablecoin framework. The project targets live transactions by March 2027 and follows an FSA-supported corporate payment pilot.

The 2027 plan will determine the project’s scope

The planned study group must decide whether Japan will create a new blockchain, connect several regulated networks or link distributed ledgers with existing market systems.

It will also need to address governance, cybersecurity, transaction privacy, operational resilience and procedures for reversing erroneous or unauthorized transfers. Around-the-clock operation would require financial institutions and regulators to maintain support beyond current market hours.

The next confirmed milestone would be an official announcement naming the participating institutions and the study group’s mandate. Its early-2027 development plan should then clarify technical architecture, funding, testing stages and any legislative changes.

Until those documents appear, the timetable and early-2030s launch remain reported targets rather than approved government deadlines.