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Japan plans blockchain settlement system to tokenize stocks and JGBs
The effort would convert a portion of banks’ Bank of Japan reserve accounts into tokenized wholesale CBDC, cutting stock settlement from two business days to near zero.
Japan regulators, the Bank of Japan, and major financial institutions plan to develop a national blockchain-based settlement system for tokenized stocks and Japanese government bonds, work aimed to begin by early 2027 and operations potentially starting in the early 2030s, according to CoinDesk. The plan would have banks convert part of their reserve accounts at the BOJ into digital tokens that function as a wholesale central bank digital currency, used for interbank settlement rather than by retail customers. If the initiative is approved and testing proceeds as expected, the settlement timeline for stock trades in Tokyo could fall from two business days after execution to nearly zero, while Japanese government bond trades could be shortened from settling the following day to nearly zero as well, CoinDesk reported. The article also cites a Nomura and Laser Digital survey showing that nearly 80% of Japanese institutional investors plan to allocate to crypto within three years, with CoinDesk noting Japan risks losing that capital to jurisdictions modernizing markets through tokenization.