Japan Plans 24/7 Blockchain Settlement for $7T Bond Market

Japan is embracing blockchain to bring its financial markets on-chain. Regulators are now exploring a blockchain-based system for near-instant 24/7 settlement of stocks and Japanese government bonds (JGBs). This plan could significantly reshape the country’s bond market operations.  

How will blockchain transform Japan’s bond market?

A Reuters report reveals that the Financial Services Agency (FSA), Ministry of Finance, and Bank of Japan are working on a plan to launch a new blockchain-based settlement system. The regulators are reportedly discussing with major banks to make settlements easier and more convenient for the $7 trillion bond market.

Notably, the blockchain project is expected to be launched by the early 2030s, with initial discussions set to begin this summer. The development plan is targeted for early 2027. If the project proceeds successfully, it could mark a major milestone for Japan’s broader blockchain experiments.

The main objective of this move is to make the stock and bond trades in Japan more efficient. Currently, it takes up to two days to settle Japanese stocks and bonds. If a blockchain-based system is introduced, this could reduce the present settlement time to almost zero. 

In Japan, this move could have a substantial impact, considering the market’s huge size. As per reports, the country has around 1,166 trillion yen in outstanding government bonds and bills. This is worth around $7 trillion at current exchange rates.

Banks are already testing blockchain

Interestingly, Japan’s latest move is built on the country’s existing blockchain initiatives. Over the past few years, the country has been making efforts to make its financial space more efficient with blockchain-based systems.

While the country earlier reduced the stock and bond settlement time from much longer cycles, it is now attempting to further shorten it. Major banks have already tested this blockchain-based system. For example, in April 2026, four major Japanese financial institutions started a blockchain-based trial for using JGBs as collateral.

In March, BOJ Governor Kazuo Ueda unveiled the central bank’s plans to test blockchain-based settlement using commercial banks’ deposits. The BOJ is also exploring tokenized central bank deposits to enable securities and cash to move at the same time through delivery-versus-payment settlement. These initiatives help banks and regulators to know how the technology works safely with the existing financial infrastructure.

Japan’s blockchain push goes beyond government bonds

It is important to note that Japan’s has its own blockchain-focused financial projects underway. Private companies have already tested tokenized securities and digital payment systems. One major example is Progmat’s recent transfer of about ¥452 billion worth of tokenized securities to its own Avalanche-based network.

Other companies are also exploring similar projects. SBI Holdings and Startale are working together to develop Strium, a blockchain platform that could support 24/7 trading of tokenized securities. The companies have planned for a public testnet this year.

Alongside tokenized securities, the country is also exploring digital payment systems. Previously, three large Japanese banks shared their yen stablecoin plans, with the final project expected in March 2027.