Japan to work on blockchain-based stock settlement system, details expected early 2027: Nikkei

Japan's top financial regulatory agencies are reportedly working to establish a blockchain-based payment infrastructure for stocks and Japanese government bonds.

The Financial Services Agency, the Ministry of Finance, and the Bank of Japan will jointly work with local institutions starting this summer to establish a development plan around the next-generation payment system, Nikkei Asia reported on Wednesday. 

The plan, expected as early as the beginning of 2027, will detail the blockchain's design, specify agency and institutional responsibilities, and outline a roadmap for future work, according to the report.

If the plan is approved, the agencies could launch the system within a few years and have it fully operational in the early 2030s, per the report. The project could be grouped under Japan's multi-year strategic sector investment framework that the government is planning to create from fiscal 2027.

The main aim of this project is to accelerate the stock and government bond settlement to real-time speed from two days. A portion of the current accounts that banks hold at the BOJ would be tokenized on a blockchain network, the report said.

On the same day, roughly 40 regional and online banks in Japan announced that they will launch a proof-of-concept for interbank transfers using tokenized deposits, with testing set to begin as early as this month, Nada News reported, citing Nikkei.

Local momentum

This major initiative follows regulatory and private sector efforts to integrate blockchain and digital assets into traditional systems.

In July, Japan passed amendments to the Financial Instruments and Exchange Act (FIEA) to reclassify roughly 105 cryptocurrencies as financial instruments, which is set to take effect during fiscal 2027. The amendments also establish the basis for separate crypto taxation at an effective rate of approximately 20%, significantly lower than current rates of up to 55%.

Earlier this month, the FSA established a dedicated cryptocurrency and stablecoin division, reflecting a strong initiative to regulate and foster the local digital asset sector.

Such regulatory movements align with the accelerating private-sector adoption of the technology.

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

Backed by the FSA, the country's three major banks — Mizuho Bank, MUFG, and SMBC — are also working on a stablecoin pilot project to innovate payment systems with blockchain.