Japan has moved to develop blockchain-based infrastructure for instantaneous, continuous settlement of government bonds and stocks.
The authorities involved (Financial Services Agency, Ministry of Finance, and Bank of Japan), together with major financial institutions, anticipate founding a study group in the summer of 2026.
Participants aim to create a development plan at the beginning of 2027, presenting the blockchain architecture, the responsibility distribution between public authorities and private institutions, and a strategy for implementation. Depending on formal approval, the infrastructure could become operational within several years, potentially by 2030, at the earliest.
Japan has conducted experiments containing distributed ledger technology before, but this initiative reportedly marks the first with a defined timeline for a production-ready system.
The blockchain’s potential to remove settlement delays
In the current’s Japanese market structure, stock transactions usually settle in two business days, and government bond trades settle the next day after execution, creating a gap between trade agreement and the transfer of cash and securities.
A blockchain-based system could narrow that gap by recording ownership changes and payments on shared digital infrastructure, possibly allowing investors to receive and reinvest proceeds from an asset sale almost instantly. Additionally, faster settlement has the potential to free up capital blocked during the settlement period and to improve overall market efficiency.
Nevertheless, a technical upgrade is not enough to establish continuous settlement; banks and brokerages would need access to cash and warranty outside standard business hours, while regulators would need to resolve questions around custody, cybersecurity, transaction finality, and operational failures.
An always-on settlement model
Japan's proposal differs from initiatives that just extend trading hours, focusing instead on settlement. Financial markets can trade 24/7 overnight while using traditional clearing systems that complete transactions during daytime business hours. Instead, Japan plans to make the post-trade process permanently available, even outside banking hours.
This distinction could be significant for Japanese government bonds, one of the world's largest sovereign debt markets, and could support Tokyo's position relative to other financial centres developing tokenised securities and extended trading sessions.
Wider industry context
Continuous trading already exists in parts of the financial system. Cryptocurrency exchanges allow trading of assets such as Bitcoin and Ether daily, weekends and public holidays included, and CME Group introduced 24/7 trading for regulated cryptocurrency futures and options in May 2026.
Traditional exchanges are moving in a similar direction. For example, the New York Stock Exchange is building a platform intended to support 24/7 trading and immediate on-chain settlement of tokenised US-listed stocks and ETFs.
