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Japan to use blockchain for real-time securities settlement

Japan to use blockchain for real-time securities settlement

MGR Online•Economy•34m ago

Reader Briefing

Japanese financial regulators and the central bank are developing a blockchain-based infrastructure to shift capital market settlements from two days to real-time.

  • •The Financial Services Agency, Ministry of Finance, and Bank of Japan plan to release a master plan in early 2027.
  • •The project aims to reduce settlement times for stocks and government bonds from two days to real-time using tokenized current accounts.
  • •Japan passed amendments to the Financial Instruments and Exchange Act in July to classify approximately 105 cryptocurrencies as financial instruments by 2027.

Overview

  • •The Financial Services Agency, Ministry of Finance, and Bank of Japan will hold discussions with local financial institutions this summer to lay the foundation for a new payment system.
  • •A detailed master plan for the blockchain settlement architecture is expected to be revealed in early 2027.
  • •The new settlement system is expected to launch initially in a few years, with full operation targeted for early the 2570s.
  • •The project aims to unlock liquidity, reduce counterparty risk, and increase capital rotation efficiency for institutional investors.
  • •Over 40 regional and online banks announced plans to test interbank transfers using digital deposits within this month.
  • •The Financial Services Agency has established a specific department to oversee cryptocurrency and stablecoins.
  • •The structural changes in Japan may pressure ASEAN capital markets, including Thailand, to accelerate the adoption of new settlement technologies to remain competitive.

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Key Entities

Organization

Financial Services Agency(สำนักงานบริการทางการเงิน)ℹ️
A Japanese financial regulator that established a specific department for cryptocurrency and stablecoin supervision.
Ministry of Finance(กระทรวงการคลัง)ℹ️
A Japanese government body collaborating on the blockchain settlement master plan.
Bank of Japan(ธนาคารกลางญี่ปุ่น)ℹ️
The central bank of Japan involved in tokenizing commercial bank current accounts for the new settlement system.
Japan Securities Clearing Corporationℹ️
A clearing house that launched a pilot project to study government bonds as collateral on blockchain.
Mizuho
A financial institution participating in a pilot project for government bond collateral on blockchain.
Nomuraℹ️
A financial institution participating in a pilot project for government bond collateral on blockchain.
Digital Assetℹ️
An entity participating in a pilot project for government bond collateral on blockchain.
MUFGℹ️
A major bank proceeding with a stablecoin project.
SMBC
A major bank proceeding with a stablecoin project.

Law

Financial Instruments and Exchange Act(กฎหมายเครื่องมือทางการเงินและตลาดหลักทรัพย์)ℹ️
A law amended in July to classify approximately 105 cryptocurrencies as official financial instruments by 2027.

Place

Japan(ญี่ปุ่น)ℹ️
The country implementing blockchain for capital market settlements and updating cryptocurrency laws.
ASEAN(อาเซียน)ℹ️
A regional group of countries whose capital markets may face pressure from Japan's financial infrastructure changes.
Thailand(ไทย)ℹ️
An ASEAN country mentioned as needing to accelerate the adoption of new settlement technologies.