Japan is preparing to explore blockchain technology as part of a major overhaul of its financial market infrastructure, with the goal of enabling near-real-time settlement for stocks and Japanese government bonds, or JGBs.

According to an Aug. 26 report from Nikkei, the initiative would involve a study group made up of the Financial Services Agency, the Ministry of Finance, the Bank of Japan and financial institutions. The group would examine how blockchain could support instant settlement for publicly traded stocks and JGBs.

A development plan could be prepared as early as the start of 2027. That plan would reportedly include a blueprint for the blockchain architecture, the responsibilities of the participating parties, and a roadmap for implementation across both private and public entities. If approved, the system could begin operating several years later, with a possible launch in the early 2030s or late 2030s.

Japan’s current settlement system for major markets still relies on delayed settlement. Stock trades typically settle two business days after the transaction, while Japanese government bonds settle on the day after trading. A blockchain-based system could combine the transfer of securities and money, allowing investors to receive proceeds from sales more quickly and redeploy funds without waiting through the existing settlement cycle.

The proposed effort is also aligned with research already underway at the Bank of Japan. The central bank has been studying settlement systems that use current-account deposits held at commercial banks on blockchain infrastructure. That research includes potential applications for interbank transfers and securities transactions.

One key concept under consideration is delivery versus payment, in which the delivery of an asset and the payment for it occur at the same time. Supporters of such a system say it could reduce the time lag between trading and receiving cash in financial markets.

Japan’s private sector is also building blockchain-based financial platforms, including tokenized securities and digital payment systems. Those projects are expected to provide a testing ground as regulators assess how the technology should connect with the country’s broader financial system, especially as policymakers weigh how new infrastructure would fit alongside existing market plumbing.

For now, the government’s effort remains in the study phase. The technology design, governance structure and implementation timeline are expected to become clearer around the next major milestone in early 2027, which will be a key checkpoint for how quickly the proposal can move from planning toward actual deployment.

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