Japan Pushes Blockchain Settlement Network for 24/7 Instant Stock, JGB Trades

Japan is moving to build next-generation financial infrastructure using blockchain technology to enable 24-hour, real-time settlement of stock and Japanese government bond trades.

Japan’s Financial Services Agency, the Ministry of Finance, the Bank of Japan and financial institutions will launch a study group this summer, the Nikkei newspaper reported on Aug. 26. The group aims to draw up a development plan as early as the start of 2027, covering the blockchain’s design, the division of roles among participating institutions and the development schedule.

A core part of the project is converting part of the current-account deposits banks hold at the BOJ into digital tokens that can circulate on a blockchain. The framework would resemble a central bank digital currency, or CBDC, but it would be used for settlement between financial institutions rather than as electronic money for individuals.

The goal is to eliminate the time gap between trade execution and settlement. In Japan, stock trades are settled two business days after execution, while Japanese government bonds, or JGBs, are settled the following day. Under the new system, investors could receive cash as soon as they sell securities and immediately reinvest it in other assets.

Japan’s three megabanks and major securities firms are already running pilot projects to manage and distribute tokenized stocks and government bonds on blockchain networks. The system being pursued by the government and the BOJ would serve as settlement infrastructure for processing payments for those tokenized securities in real time. If the plan is finalized, preparations for operations could begin within several years, with the system potentially starting up as early as the early 2030s.

Japan is also considering using the technology for international remittances in the future. Since 2024, the Bank for International Settlements has been conducting a blockchain-based cross-border payment pilot involving central banks in Japan and Europe. With the US and Europe leading in securities tokenization and China also moving to build next-generation international payment networks, Japan is accelerating its own efforts to avoid falling behind in the competition over financial-market infrastructure.