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.
A Government Study Group for Blockchain Settlement
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. The proposed blockchain infrastructure would connect securities transfers and corresponding cash payments more closely, allowing investors to gain access to sale proceeds faster and potentially reinvest the funds almost immediately.
Targeting Existing Settlement 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. 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. 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.
BOJ 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. 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.
Private Sector Already Building Tokenized Securities
Japan's private financial sector has already developed blockchain platforms for regulated securities. Progmat recently migrated 452 billion yen 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 with a public test network planned for 2026. Japan's three largest banks are separately preparing a shared yen stablecoin framework, targeting live transactions by March 2027.
What the 2027 Plan Must Decide
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 early-2027 development plan should 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.
