Japan's financial regulator, together with the Ministry of Finance and the Bank of Japan, is launching an ambitious project to introduce distributed ledger technology into the national settlement infrastructure. The goal is to create a system for instant settlement of transactions involving stocks and government bonds, which should radically accelerate existing processes.
From two days to a second
Currently, the standard settlement cycle for stocks in Japan takes two business days (T+2), and for government bonds, one day. Blockchain solutions would reduce this period to nearly zero, giving market participants the ability to instantly reinvest funds after a trade closes. A working group, planned to be formed as early as this summer, will focus on defining the system's architecture and allocating responsibilities among participants.
According to the plans, the project's roadmap should be ready by early 2027, and a full-scale launch of the infrastructure could occur in the first half of the next decade, provided the project receives final approval.
Experiments are already underway
This is not the first attempt by Japanese authorities to integrate blockchain into the financial system. Previously, the Financial Services Agency (FSA) supported a pilot project to record rights to bonds, investment funds, and stocks on a distributed ledger with settlements in stablecoins. In parallel, the Bank of Japan is testing the use of tokenized central bank reserves for settlements, viewing securities as one of the key use cases.
The new initiative aims to consolidate these disparate experiments into a unified national infrastructure. Authorities are also considering using the system for international transfers, which could significantly enhance the attractiveness of the Japanese market to global investors.
The race for leadership in tokenization
The United States and Europe are already actively developing the tokenization of real-world assets (RWA), and Japan risks losing foreign investors if it fails to meet global standards. According to analytical platforms, the RWA segment (excluding stablecoins) has reached $38.3 billion, with $15.6 billion attributed to U.S. government bonds.
Against this backdrop, the example of the United Kingdom is telling, where forecasts suggest tokenization could contribute up to £33 billion annually to the economy over the next ten years.
Expert comment: Japan is demonstrating a consistent and systematic approach to integrating blockchain into financial infrastructure. Unlike many jurisdictions that limit themselves to pilot projects, Tokyo is clearly aiming to build a full-fledged national system. If the project is implemented within the stated timeframe, it could become one of the most significant examples of government adoption of DLT technologies in the world.