Japan Targets Blockchain-Based Settlements by Early 2030s

Japan's Financial Services Agency (FSA), Finance Ministry, and Bank of Japan are joining forces to explore blockchain-based systems for real-time stock and bond settlements by the early 2030s. The initiative aims to replace traditional securities settlement infrastructure with a more efficient and faster system.

The current system takes two business days to settle transactions, known as T+2. However, the new system would enable near-instant settlements that run 24/7. Mitsubishi UFJ Financial Group (MUFG), Japan's largest bank, has already announced a proof-of-concept for on-chain Japanese Government Bond repo transactions using the Canton Network.

Other major banks such as Mizuho are also backing plans for around-the-clock JGB trading on blockchain infrastructure, with early frameworks expected to take shape by 2026. The Bank of Japan is running its own parallel track, launching a sandbox program for blockchain-based interbank and securities settlements in 2026.

The study group's composition signals the government's serious commitment to this initiative, integrating regulatory, monetary, and fiscal policy perspectives from the start. This collaboration between private banks and government agencies will help ensure that the new system meets the requirements of one of the world's largest bond markets.