Japan Moves $7 Trillion Bond Market to Blockchain
Japan's government is working on a plan to transition its $7 trillion bond market to blockchain technology. The move aims to reduce settlement times for stock and Japanese government bonds (JGBs) from two days to near zero, allowing sellers to reinvest their cash almost instantly.
The work starts this summer, led by the Financial Services Agency (FSA), the Ministry of Finance, and the Bank of Japan. A study group consisting of banks will develop a plan expected to be completed by early 2027, with the system going live in the early 2030s.
Japan has upgraded its financial systems before, gradually reducing settlement times for JGBs from two days in 2018 to one day in 2019. However, this new initiative would leapfrog other countries' progress and erase delays entirely.
The banks are not waiting, with four of Japan's biggest lenders already running a blockchain collateral trial for JGBs since April 2026. Major Japanese firms like Mizuho, Nomura, JSCC, and Digital Asset are testing tokenized JGB collateral transfers using the Canton Network.