Japan is considering a blockchain-based payment and settlement infrastructure for transactions involving stocks and Japanese government bonds (JGBs), according to a report from the Nikkei newspaper.
The initiative is expected to involve the Financial Services Agency (FSA), the Ministry of Finance, the Bank of Japan, and financial institutions. A study group is planned, with a development plan potentially targeted for early 2027.
The proposed system would aim to enable instantaneous settlement and could become operational in the early 2030s, subject to further study and government approval. The project remains under consideration, and no final launch date or operating framework has been announced.
Japan is examining whether blockchain technology can shorten the time between a trade being executed and the transfer of cash and securities. Currently, those steps are separated by settlement cycles that give banks, brokers, clearing organisations and investors time to complete their obligations.
A planned study group will examine the blockchain architecture, institutional responsibilities and implementation roadmap. The effort will address both technical and regulatory issues rather than simply choosing a blockchain network. Any new financial-market infrastructure would need to operate during periods of market stress, protect transaction data, maintain legal ownership records, and provide safeguards against errors, fraud and operational failures.
The FSA is already supporting proof-of-concept projects involving major Japanese securities firms and megabank groups. The projects are testing on-chain delivery-versus-payment (DvP) settlement. According to the FSA, instant on-chain DvP could reduce settlement risk and operational workloads. Over the longer term, it could also support 24/7 securities trading and greater participation by overseas investors.
Settlement may seem like a technical part of financial markets, but it affects how quickly money moves through the economy. When a stock is sold, the transaction is completed right away, although cash and securities are not always transferred at the same time. Funds could be made available sooner with a quicker settlement procedure.
Executions are settled after two business days under the current T+2 settlement cycle used by Japan’s stock market. The Tokyo Stock Exchange and related infrastructure began implementing this system in 2019. Other arrangements are sometimes used in transactions involving Japanese government bonds (JGBs) outside of Japan, but for domestic JGBs, the settlement is typically T+1, with payments taking place on the following business day.
The blockchain proposal would go beyond a shift from T+2 to T+1. By coordinating ownership data and payment instructions on a shared ledger, some of these procedures are intended to be shortened. A programmed transaction might transfer an asset only once the matching payment is made, eliminating the need for various systems to constantly reconcile data.
One of the pillars driving Japan’s blockchain settlement ideas is the notion of delivery versus payment (DvP). As stipulated by the DvP, securities are transferred only after the money has been transferred, to ensure that neither side in the transaction does his or her part without getting the expected return.
In traditional settlement systems, multiple institutions coordinate this process through established procedures, accounts and messaging networks. A blockchain-based DvP system could instead use programmable rules to link the payment and securities transfers.
According to the Bank of Japan (BOJ), the use of central bank money in the settlement of blockchain-based assets has been proposed. In 2026, Governor Kazuo Ueda stated that experiments were being conducted with the utilisation of central bank money as current account deposits on blockchain networks. The BOJ is hopeful of securing transmission of dividends, interbank transfers, as well as securities settlement.
Japan already has a growing network of private-sector projects focused on tokenised securities, providing a foundation for the government’s proposal. In May 2026, the Financial Services Agency (FSA) said it was supporting proof-of-concept projects involving Nomura Securities, Daiwa Securities and the country’s three megabank groups. The work is examining on-chain securities settlement and instant delivery-versus-payment (DvP).
The projects show that Japan’s efforts extend beyond cryptocurrencies and other digital assets. Regulators and financial institutions are exploring whether distributed-ledger technology can be integrated into regulated capital markets. The experiments also allow policymakers to test issues such as legal ownership, interoperability, transaction privacy, operational resilience and links to existing book-entry systems before considering broader deployment.
Japan’s blockchain settlement plans could eventually extend beyond domestic securities markets into international payments. According to the Nikkei report, the instant-payment infrastructure could also be used for international remittances.
Cross-border payments involve multiple banks, currencies, regulatory regimes and time zones. A blockchain-based network could enable payment instructions and settlement assets to move more continuously, rather than relying solely on correspondent banking networks and operating schedules.
The notion is consistent with the wider investigation conducted by the Bank of Japan. The use of central bank funds for transactions involving payment instruments on various blockchain networks and blockchain interoperability have been addressed by Governor Kazuo Ueda.
Along with comparable initiatives in other financial hubs, Japan is researching blockchain-based settlement. Tokenised bonds, digital securities, central bank money, and blockchain settlement systems are being tested by markets all around the world.
Japan’s proposal stands out because it could bring together traditional stocks, government bonds, and central-bank money within a regulated domestic framework. The FSA’s current work already covers multiple types of securities and includes synchronised delivery-versus-payment transactions on blockchain networks.
Japan also benefits from an established financial sector that includes major banks, securities firms, exchanges and a central bank with experience overseeing large infrastructure projects.
At the same time, any future system will need to connect with international financial infrastructure. Japanese institutions operate globally, and overseas investors require compatibility with cross-border market systems.
