Japan’s top financial authorities are preparing a plan to build blockchain-based infrastructure for settling stocks and Japanese government bonds, in a move that could overhaul how securities transactions are completed in the country’s financial markets.
The Financial Services Agency, Ministry of Finance and Bank of Japan are expected to work with domestic financial institutions starting this summer on a development plan for the next-generation settlement system, according to Nikkei Asia, as reported by The Block. The plan could be completed as early as early 2027 and would define the blockchain’s architecture, responsibilities of government agencies and financial institutions, and the project’s longer-term roadmap.
The initiative aims to reduce settlement times for stocks and government bonds from the current two days to real time. Under the proposed system, a portion of the accounts that banks currently maintain at the Bank of Japan would be tokenized on a blockchain network, according to the report.
If approved, the system could be launched within several years and become fully operational in the early 2030s. The project could also be incorporated into Japan’s planned multi-year strategic-sector investment framework beginning in fiscal 2027.
The proposal comes as Japan’s financial sector accelerates its adoption of blockchain-based infrastructure. On the same day, about 40 regional and online banks announced plans for a proof-of-concept involving interbank transfers using tokenized deposits, with testing potentially beginning this month.
The government’s plans also build on a series of recent regulatory changes. In July, Japan passed amendments to its Financial Instruments and Exchange Act that will reclassify about 105 cryptocurrencies as financial instruments from fiscal 2027 and establish the basis for a separate crypto-tax regime with an effective rate of about 20%, down from current rates of as much as 55%.
The Financial Services Agency also established a dedicated cryptocurrency and stablecoin division earlier this month, signaling a more structured approach to developing and regulating digital-asset markets.
Japan’s securities infrastructure is already testing blockchain applications. In April, the Japan Securities Clearing Corp., a clearing house owned by Japan Exchange Group, began a trial with Mizuho, Nomura and Digital Asset to explore using Japanese government bonds as blockchain-based collateral.
The country’s three largest banks — Mizuho, MUFG and SMBC — are also working on a stablecoin pilot backed by the FSA, aimed at exploring blockchain-based payment systems.
The planned settlement network represents a potentially significant shift in Japan’s approach to blockchain. Rather than treating the technology primarily as infrastructure for cryptocurrencies, authorities are exploring its use for the core plumbing of traditional capital markets.
The key test will be whether tokenized settlement can deliver genuinely faster transactions while preserving the reliability, liquidity and regulatory controls required of Japan’s stock and government-bond markets. For now, the project remains at the planning stage, with the first detailed blueprint potentially due in early 2027.