Japan Taps Blockchain for Instant Stock Settlement
Japan is taking steps to modernize its financial infrastructure by exploring the use of blockchain technology for settling stock and government bond transactions. Currently, it takes two business days (T+2 settlement) in Japan for stock trades to be settled, while government bond transactions settle the following day. However, a proposed blockchain-based system could reduce this time gap significantly, allowing investors who sell assets to receive their proceeds almost instantly.
The Financial Services Agency, Ministry of Finance, Bank of Japan, and financial institutions are planning to establish a study group this summer, with a development plan expected around the beginning of 2027 at the earliest. The plan will determine the design of the blockchain network, assign responsibilities among government agencies and participating financial institutions, and establish a road map for building the infrastructure.
The move follows experiments already underway in Japan's financial sector, including a demonstration involving major securities firms and megabanks through the Payment Innovation Project. This initiative is testing blockchain-based transfers of rights to government bonds, corporate bonds, investment trusts, and stocks, using stablecoins to settle payments. Financial Services Minister Satsuki Katayama said that faster settlement using blockchain and stablecoins could help Tokyo compete with other financial centers experimenting with new trading infrastructure.