Japan’s Financial Services Agency, Finance Ministry, and the Bank of Japan are forming a study group this summer with the country’s largest financial institutions to explore replacing traditional securities settlement infrastructure with blockchain-based systems. The target: real-time, round-the-clock stock and bond settlements operational by the early 2030s.
A development plan is expected by early 2027, with a comprehensive operational framework to follow in subsequent years.
From T+2 to T+zero
When you buy shares on the Tokyo Stock Exchange, the actual exchange of securities and cash doesn’t happen instantly. It typically takes two business days, a convention known as T+2. During that gap, counterparty risk lingers, capital sits locked up, and back-office systems grind through reconciliation processes.
The initiative isn’t purely theoretical. Mitsubishi UFJ Financial Group, Japan’s largest bank, announced a proof-of-concept in August 2026 for on-chain Japanese Government Bond repo transactions using the Canton Network. The system is designed to enable near-instant settlements that run 24 hours a day, seven days a week, rather than only during traditional banking hours.
MUFG isn’t working alone. Mizuho and other major banks are reportedly backing plans for around-the-clock JGB trading on blockchain infrastructure, with early frameworks taking shape as soon as 2026.
Tokenized bonds already in the wild
Nomura, working with the BOOSTRY platform, issued the first domestic digital bond in 2025. That issuance featured a delivery-versus-payment settlement mechanism with T+1 DVP settlement. The bond carries a maturity date of March 2030.
The Bank of Japan is running its own parallel track. A sandbox program for blockchain-based interbank and securities settlements launched in 2026 and runs through 2028.
Major banks are also pushing for trading frameworks built around stablecoins, digital tokens pegged to fiat currency values. Stablecoin-denominated settlement would reduce friction, lower transaction costs, and keep the entire lifecycle of a trade within a single technological environment.
Why Japan is moving faster than most
Japan was one of the first countries to regulate crypto exchanges after the Mt. Gox collapse in 2014. Japan’s population is aging, its workforce is shrinking, and its financial institutions face pressure to do more with less. Automating settlement processes that currently require armies of back-office staff isn’t just a technology upgrade — it’s a demographic necessity.
The study group’s composition signals how seriously the government is taking this. Having the FSA, Finance Ministry, and BOJ all at the table alongside private banks means regulatory, monetary, and fiscal policy perspectives are being integrated from the start, rather than bolted on after the technology is built.
What to watch
The MUFG proof-of-concept on the Canton Network deserves particular attention. Canton was designed specifically for institutional finance applications, with privacy features that let counterparties transact on a shared ledger without exposing sensitive data to every participant.
The BOJ sandbox running through 2028 provides a natural checkpoint. Two years of controlled testing should generate enough data to confirm whether blockchain settlement can handle the volume, speed, and reliability requirements of one of the world’s largest bond markets.
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