Japan’s clearing house said it will test the use of blockchain to handle government bond collateral in a move that could modernize how one of the world’s largestJapan’s clearing house said it will test the use of blockchain to handle government bond collateral in a move that could modernize how one of the world’s largest

INSTITUTIONAL | Japan to Test On-Chain Government Bonds as Collateral While Maintaining Legal Status

2026/04/22 18:00
2 min read
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Japan’s clearing house said it will test the use of blockchain to handle government bond collateral in a move that could modernize how one of the world’s largest sovereign debt markets operates.

Japan Securities Clearing Corporation (JSCC), part of Japan Exchange Group, will launch a proof-of-concept with Mizuho Financial Group, Nomura Holdings and Digital Asset to examine whether Japanese government bonds (JGBs) can be used as digital collateral on the Canton Network, the companies said.

The trial will assess whether JGBs can be transferred and managed on blockchain infrastructure while maintaining their legal status under Japan’s Book-Entry Transfer Act and Financial Instruments and Exchange Act, a key requirement for any future commercial rollout.

The project will also test whether existing financial systems can integrate with the Canton Network to enable real-time, 24-hour collateral transactions, including cross-border settlement, replacing processes currently limited to business hours.

Japan’s Financial Services Agency selected the initiative for support under its Payment Innovation Project, part of a broader push to modernize financial infrastructure using distributed ledger technology.

The pilot builds on earlier tests on the Canton Network involving tokenized U.S. Treasuries and reflects growing efforts among major financial institutions globally to improve collateral efficiency through blockchain without disrupting existing regulatory frameworks.

No timeline for commercial deployment has been announced, with the results expected to inform future policy and infrastructure decisions, JSCC said.

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