Japan’s Financial Services Agency, Ministry of Finance, Bank of Japan, and financial institutions are reportedly planning to establish a study group this summer to examine a blockchain-based system for instant cash settlement of stock and government bond transactions. The initiative aims to replace current settlement timelines—T+2 for equities and T+1 for domestic government bonds—with real-time processing through digital tokens.
The proposed system would convert bank deposits held in Bank of Japan current accounts into digital tokens, enabling interbank settlement via blockchain technology. Finalising infrastructure plans is expected by early 2027, with potential operational deployment in the early 2030s. The study group’s findings could mark a significant shift in Japan’s financial markets, aligning settlement processes with emerging digital infrastructure.
Officials have not confirmed details of the token conversion mechanism or the study group’s exact scope. However, the move reflects broader global efforts to modernise financial systems, reducing settlement risks and enhancing efficiency. The Bank of Japan and regulatory bodies have not yet issued formal statements on the proposal.
Written by Rebecca Shaw
Industry Desk
