Japan eyes blockchain for instant stock, government bond settlement, Nikkei reports

Japan is preparing to implement a groundbreaking payment infrastructure that will leverage blockchain technology to enable instantaneous settlement of stock and Japanese government bond transactions, according to a Nikkei newspaper report. The Financial Services Agency, Ministry of Finance, Bank of Japan, and various financial institutions are set to launch a joint study group this summer. This group is expected to finalize a development plan by early 2027 at the earliest. The plan will outline the design of the blockchain system, define responsibilities among participating agencies and institutions, and establish a roadmap for future implementation. If formally approved, the system could be operational within a few years, potentially launching in the early 2030s. This initiative aims to bridge the gap between trade execution and cash settlement, allowing investors to reinvest proceeds from asset sales almost immediately. Currently, stock trades settle two days after execution, while Japanese government bond transactions settle the following day. The report also suggests the instant payment system could be extended to international remittances.