Japan is preparing to use blockchain technology to speed up the settlement of stocks and government bonds, as authorities explore a major upgrade to the country’s financial market infrastructure.
Japan’s Financial Services Agency, Ministry of Finance, Bank of Japan and financial institutions are expected to work together on the initiative, with a study group tasked with shaping the system’s design, clarifying agency roles and setting out an implementation roadmap.
A development plan is targeted for early 2027, while a full system could potentially go live in the early 2030s, Reuters reported, citing Nikkei.
The move would reshape Japan’s market infrastructure by cutting settlement times from two business days for stocks and one day for government bonds to near real time, allowing investors to access and reuse funds faster while reducing risks tied to unsettled trades.
Japan has already begun testing the rails
The latest plan builds on work already under way inside Japan’s financial sector.
In February, the FSA formally approved support for a blockchain securities-settlement proof of concept involving Nomura Securities, Daiwa Securities, Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.
The experiment revolves around testing whether securities ownership can be transferred and recorded on blockchain while settlement payments are completed at the same time using stablecoins.
The scope stretches across government bonds, corporate bonds, investment trusts and equities, with the FSA saying instantaneous delivery-versus-payment could reduce settlement risk and operational burdens.
The regulator has also flagged longer-term possibilities including 24-hour securities trading and broader participation from overseas investors.
If Japan expands blockchain settlement beyond pilot programs, it could bring faster transactions across one of the world’s largest financial markets, while opening the door to 24-hour trading and broader cross-border use.
Japan tightens oversight of assets already on-chain
While Japan is looking to bring more traditional assets onto blockchain infrastructure, regulators are also tightening controls around crypto assets already moving on-chain.
On Aug. 6, Japan’s Financial Services Agency and National Police Agency urged cryptocurrency exchanges to strengthen fraud controls as crypto becomes a more common channel for investment scams, impersonation schemes and stolen funds.
The agencies outlined 11 measures aimed at preventing crypto-related fraud and stopping stolen funds from moving through exchanges, covering withdrawals, transaction monitoring, identity checks and cooperation with police, including temporary withdrawal delays, stricter monitoring of suspicious activity and faster account freezes when fraud risks emerge.
