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On August 26, Nikkei reported that Japan’s Financial Services Agency, Ministry of Finance and Bank of Japan will build a blockchain settlement system for stocks and government bonds.

The target is a bond market of roughly ¥1,000 trillion, about $7 trillion.

Topline

The headline word is blockchain. The decision underneath is about money, because Japan plans to settle trades in tokenized central bank reserves. That is the opposite of what America chose eight months ago.

Here is the shape of it:

  • The cash leg is tokenized Bank of Japan current accounts. A slice of the reserves banks already park at the central bank moves onto a ledger.

  • The securities leg is stocks and JGBs, today cleared through JASDEC and settled in central bank money over BOJ-NET.

  • The target is real-time settlement, replacing T+2 for equities and T+1 for JGBs.

  • The plan is due at the beginning of 2027 at the earliest. It will name the design, split responsibilities between agencies and institutions, and set the schedule.

  • The money may come from Japan’s multi-year strategic sector investment framework, which the government intends to create from fiscal 2027. That framework does not exist yet.

  • Live operation is targeted for the early 2030s.

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Why it matters

Every settlement system has two legs, the security and the cash, and the cash leg is where the power sits. America answered this question in December 2025. The DTCC took an SEC No-Action Letter and then picked Canton, a permissioned network backed by Goldman Sachs, Citadel, BNP Paribas and Tradeweb. The cash leg there is commercial bank money and stablecoins, and the owners are the firms that trade on the rail.