Japan Targets Blockchain-Based Settlement System for Stocks and Bonds by Early 2030s

Japan's financial regulators and major institutions are working on a blockchain-based settlement system for stocks and Japanese government bonds. The new infrastructure aims to reduce settlement times from two business days after execution to near-zero, allowing investors to reinvest proceeds almost immediately.

The project involves the Bank of Japan (BOJ), the Financial Services Agency (FSA), the Ministry of Finance, and top banks like MUFG, SMBC, and Mizuho. They plan to launch a group this summer with the goal of beginning work by early 2027.

According to Nikkei, the BOJ will convert a portion of reserve accounts held at the central bank into digital tokens that function as a wholesale central bank digital currency (CBDC). This would reduce settlement times for stock and bond trades, making Japan's capital markets more competitive with the U.S. and Europe.