Japan works on blockchain settlement for bonds and shares

Japan wants to modernise its financial infrastructure using blockchain. The Japanese government, the Bank of Japan and a range of financial institutions are working together on a system that allows government bonds and shares to be settled directly around the clock, seven days a week. This is the first time Japan has set a concrete timeline for introducing blockchain into the mainstream financial system.

In brief:

• Japan wants to use blockchain for 24/7 real-time settlement of bonds and shares.
• A joint working group of the government, central bank and financial institutions will start this summer.
• The development plan is expected in early 2027.

Working group starts this summer

According to the Nikkei, the Japanese Financial Services Agency (FSA), the Ministry of Finance, the Bank of Japan and the financial institutions involved will set up a joint working group this summer. The group will work over the coming months on a concrete development plan, which should be ready in early 2027.

The plan focuses on the architecture of the blockchain and the division of responsibilities between the government, the central bank and private financial institutions. Japan has previously carried out experiments with blockchain in the financial sector, but until now no formal implementation schedule had been set.

Real-time settlement as the goal

With the new system, Japan wants to fully automate the settlement of financial transactions and make it continuously available. Traditional systems generally operate only on business days and within fixed time windows. Blockchain makes it technically possible to process transactions at any time of day and confirm them instantly.

Japan is not the only country working on this. Standard Chartered recently announced that it would be the first bank to distribute Hong Kong’s HKDAP stablecoin, which likewise points to a broader trend in which traditional financial institutions are integrating blockchain into existing infrastructure. The Japanese project stands out because of the direct involvement of the government and the central bank, as well as the concrete timeline towards implementation.