Japanese financial institutions are making their most ambitious move yet into digital assets. A consortium of Japan’s largest banks and securities companies plans to tokenize Japanese government bonds and use stablecoins to settle transactions. It is planned that instant payments will be available 24 hours a day, 365 days a year by the end of 2026.
Japan puts $1.6 trillion repo market on blockchain
A consortium of Japan’s top financial institutions plans to start trading tokenized government bonds 24/7 by the end of 2025, the Nikkei Shimbun reported.
The system issues and settles bonds as blockchain-based security tokens… pic.twitter.com/LtHUtX7wF5
— BSCN (@BSCNews) May 8, 2026
This initiative targets the Japanese repo market directly. This represents approximately 10% of the global market valued at $16 trillion. Today’s blockchain news from Japan is not from startups. It comes from the heart of this country’s traditional financial system.
Who is behind it and how does it work?
The project is led by the Digital Asset Co-Creation Consortium run by Progmat. A blockchain infrastructure startup with deep ties to Japanese megabanks. The working group will be launched in May 2026, with a formal report expected to be released in October, including legal, tax and operational issues. Individual proof-of-concept projects will run in parallel, with the goal of full effort to actually begin by the end of the year.
This working group is like a financial portrait of Japan and the world. Japan’s three megabanks, MUFG, Mizuho Bank, and Sumitomo Mitsui Banking Corporation, are all participating. BlackRock Japan, Daiwa Securities, SBI Securities, State Street Trust Bank and Tokio Marine Holdings round out the consortium. Its institutional weight is important. This is not an exploratory experiment. This is something that the industry is working together to drive towards live infrastructure.
T+0 breakthrough and why it matters
The highlight of the initiative is the realization of T+0 payments. Same-day finality with on-chain transactions. The current standard in Japan is T+1. This means that settlement occurs on the next business day after the transaction is executed. When you combine tokenized government bonds with stablecoins, that window collapses to nearly zero.
For Bank of Japan news watchers, the capital controls angle is important. T+0 positions can be opened and closed within one day, so they do not appear on the end-of-day balance sheet. This structure could potentially exempt these transactions from capital adequacy regulations. This poses a risk to the weight and leverage ratios that currently limit how actively banks can participate in the repo market.
Borrowers can obtain efficient intraday liquidity. Lenders, including non-residents, gain a new investment vehicle that combines JGB-grade security with 24-hour accessibility.
What this means for investors and developers
For investors, Japan’s moves signal that tokenized government bonds are graduating from pilot projects to market infrastructure. DTCC has already processed over $330 billion of tokenized Treasury transactions in the US, and adding the Japanese repo market to that trend will open up a $1.6 trillion segment on blockchain rails. MUFG’s Progmat platform as connective tissue.
For developers building on top of organized blockchain infrastructure, the DCC working group represents an open framework. The consortium clearly frames issues from legal, accounting, tax, operational, and technical perspectives. We are creating a compliance strategy that is likely to be referenced in other markets. Japan has historically intentionally promoted financial innovation. When you move, move with confidence. It is unlikely that the repo market will be on-chain by the end of 2026. This is a planned development.
