Japan's JSCC partners with Mizuho, Nomura to test government bonds on blockchain

Japan Securities Clearing Corporation, a clearing house owned by Japan Exchange Group, has launched a trial in partnership with Mizuho, Nomura, and Digital Asset to explore using Japanese government bonds (JGBs) as collateral on the blockchain.

In a joint statement released Monday, the companies said the proof-of-concept trial will test the onchain transfer and management of JGBs by integrating existing systems on Canton Network across multiple institutions.

The trial will assess the feasibility of real-time collateral transactions while ensuring compliance with relevant financial instruments and exchange laws. It will also examine cross-border use cases involving clearing houses, institutional investors, and other market participants.

The companies said the trial is part of a broader Financial Services Agency initiative under its Payment Innovation Project, which aims to accelerate blockchain-based payment innovation.

The companies also noted that advancing collateral management for JGBs has become an "urgent priority," as overseas markets — particularly the U.S. — gain momentum in testing similar infrastructure. 

In the U.S., the Depository Trust & Clearing Corporation has launched a limited pilot to place representations of U.S. Treasury securities held by its depository subsidiary on the blockchain.

Similar efforts are also underway in South Korea. Ripple has partnered with Kyobo Life Insurance to enable tokenized government bond transactions. Separately, South Korea's Ministry of Finance and Economy has launched a pilot project to test blockchain-based deposit tokens for official duty expenses.