Japan is launching a joint working group this summer, together with the Financial Services Agency, the Ministry of Finance and the Bank of Japan, to develop by early 2027 a plan to modernize its stock and bond settlement systems using blockchain. Currently, a stock trade settles in two business days and a government bond in one day ; the goal is to reduce this delay to a few seconds, around the clock, including weekends. Four of Japan’s largest banks are already testing this technology since April on government bond collateral. Japan, which holds the world’s second-largest sovereign debt in absolute value, aims to reduce its debt financing costs while eliminating counterparty risk linked to settlement delays. Full implementation is however expected in the early 2030s.
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