Japan is preparing plans for a blockchain-based system that could allow stocks and Japanese government bonds to settle almost instantly, around the clock, as the country looks to modernise its financial market infrastructure.
The Financial Services Agency (FSA), Ministry of Finance, Bank of Japan (BOJ) and financial institutions are expected to form a study group this summer to examine how the system could work. The group is expected to produce a development plan as early as the beginning of 2027.
If the plan is approved and development proceeds, the system could become operational in the early 2030s.
The proposed infrastructure would use blockchain to record and settle securities transactions, potentially allowing investors to receive assets and payments without waiting for the settlement periods used in Japan’s current market.
Japan wants faster settlement
Stock trades in Japan currently settle two business days after a transaction, while Japanese government bond transactions settle the following day.
The proposed blockchain system would seek to remove that waiting period by allowing securities and payments to settle in real time. This could allow investors to reuse funds almost immediately after a transaction is completed.
The FSA has already identified instantaneous settlement as one of the potential benefits of using blockchain for securities. In a May 2026 statement, the agency said blockchain-based settlement could reduce settlement risk and operational work. It also said the technology could eventually support securities trading 24 hours a day, seven days a week.
The planned study group is expected to examine the technical design of the blockchain system, how responsibilities would be divided between government agencies and private financial institutions, and the steps needed to put the system into operation.
BOJ reserves could play a role
The payment side of the proposed system could involve tokenised money.
The Bank of Japan has been examining how central bank reserves and commercial bank deposits could operate in tokenised form on blockchain networks.
In a May speech, Bank of Japan(BOJ) Deputy Governor Ryozo Himino described a possible model in which tokenised bank deposits and tokenised central bank reserves operate on blockchain. He said such a system could support delivery-versus-payment, where a tokenised asset and its payment are transferred together.
However, Japan has not confirmed that tokenised BOJ reserves will be used in the planned stock and bond settlement system.
The BOJ’s work is a separate experiment that could provide technology for blockchain-based payments and settlement. The connection between the two initiatives is the use of tokenised money to settle tokenised financial assets.
Japan has already tested blockchain settlement
The latest plan follows blockchain experiments already supported by Japanese regulators and financial institutions.
The FSA is supporting a project testing blockchain-based transfers of Japanese government bonds, corporate bonds, investment trusts and shares. The experiment links securities transfers with payments using stablecoins, allowing researchers to test delivery-versus-payment on blockchain.
Japan’s three megabanks are also involved in experiments involving stablecoins and tokenised deposits.
These tests are giving Japanese financial institutions a way to examine how blockchain could work alongside existing financial infrastructure before any national system is considered.
What the proposed system could change
A 24/7 settlement system would mean financial transactions would no longer have to depend entirely on the operating hours and settlement schedules of existing market infrastructure.
For investors, faster settlement could mean quicker access to funds and securities. For financial institutions, it could reduce the amount of time that capital remains tied up between a trade and its final settlement.
Blockchain could also allow the securities and payment legs of a transaction to be connected. Instead of one system confirming the transfer of an asset and another processing payment, both could be completed together through delivery-versus-payment.
The FSA has said this could reduce settlement risk and make Japan’s markets more accessible to investors operating outside the country’s normal market hours.
Still, the project remains at the planning and testing stage.
Japan’s study group is expected to work on a development plan by early 2027. Any move toward a live system would come later, with the early 2030s being reported as a possible timeframe.
For Japan, the project could become one of the country’s largest tests of blockchain technology in traditional financial markets, moving the technology from pilot projects into the infrastructure used to settle stocks and government debt.