Japan is preparing to build a payment infrastructure using blockchain to enable instant settlement of stock and Japanese government bond transactions. This is currently in the research and planning stage, and no approved construction project has been formed yet.

The Financial Services Agency, Ministry of Finance, Bank of Japan, and financial institutions plan to launch a research group this summer, with the earliest development plan to be formulated by early 2027, clarifying the design of the blockchain system, the division of responsibilities among participating institutions, and the subsequent roadmap for advancement.

If the proposal is formally approved, the system could be completed within a few years, potentially starting operations as early as the early 2030s. According to Nikkei, this infrastructure may also extend to international remittances in the future, but details on cross-border participating countries, settlement currencies, or access standards have not yet been disclosed.

Currently, cash settlement for stock transactions in Japan typically completes two business days after the trade, known as T+2; while Japanese government bond transactions usually settle the next day, known as T+1. The goal of the new system is to compress the transaction, securities delivery, and payment processes to occur nearly simultaneously.

Instant settlement means that sellers can almost simultaneously receive reinvestable funds after selling assets, and buyers can quickly confirm securities delivery; this will shorten the exposure window for counterparty defaults and delivery failures, and reduce the collateral and liquidity demands that brokers, banks, and clearing institutions need to freeze to cover the settlement cycle.

The report did not specify whether a public chain, permissioned chain, or hybrid architecture would be used, nor did it confirm whether the Bank of Japan would tokenize its current account deposits. Details regarding "24-hour operation," "central bank deposits on-chain," or specific banks already involved have not been independently confirmed by official announcements related to this Nikkei report.

In terms of market mechanisms, securities firms, custodians, clearing institutions, banks, and large institutional investors will become direct users of the new settlement track; capital will flow into ledger infrastructure, identity verification, custody, compliance, system integration, and cybersecurity. Traditional back-office processes that rely on T+1/T+2 cycles to manage margin, credit, and reconciliation will be under pressure, while fintech and infrastructure providers that can offer atomic settlement, real-time risk management, and cross-institution interoperability will benefit.

Source: Public Information