This summer, the Japanese government, the Bank of Japan, and financial institutions will establish a working group on blockchain-based settlement infrastructure to make settlements for government bonds and stocks instantaneous and available 24 hours a day. The development plan is scheduled to be finalized by early 2027, with full-scale implementation potentially starting in the early 2030s.
The idea is to transfer part of the balances held in banks’ current accounts at the Bank of Japan into blockchain-based tokens. This format is intended for settlements among financial institutions rather than for everyday payments by citizens.
However, there’s a challenge: in Japan, stock settlements still follow the T+2 cycle (two business days after the transaction), whereas the U.S. already switched to T+1 in 2024, and Europe will do so in 2027. Until securities settlement times are accelerated, speeding up the monetary settlement process alone will have only a limited effect. Meanwhile, securities are actively being tokenized in the U.S. and Europe, and Japan fears falling behind and losing sight of foreign investors.