Japan Prepares Blockchain System for Immediate Stock Settlement

The Japanese government is planning to implement a blockchain-based system for settling stock and bond transactions. The Financial Services Agency, Ministry of Finance, Bank of Japan (BOJ), and financial institutions will establish a study group this summer to develop the infrastructure.

The proposed system would allow immediate cash settlement of stock and bond trades at any time of day, rather than following the current T+2 or T+1 timeframe. It would also convert some deposits held by banks in BOJ current accounts into digital tokens that could be used for interbank settlement on a blockchain.

The study group aims to produce a development plan by early 2027 and could see the system operating as early as the 2030s if formally approved. The Japanese government is looking to leverage blockchain technology to improve the efficiency of its financial systems.