Japanese government bonds go to Onchain through New JSCC and Mizuho Blockchain Pilot
Key Takeaways:
JSCC, Mizuho and Nomura launched a PoC on April 20, 2026 to test JGB's digital guarantee on the Canton Network. The JFSA-sponsored trial targets 24/7 real-time cross-border bail settlement, replacing traditional business hours processing. The results of the PoC, which runs until September 2026, will lead to legal changes and commercialization of the onchain JGB guarantee.
JSCC, Mizuho, Nomura Test 24/7 JGB Warranty Settlement by Katon Network
The joint initiative, announced on April 20, 2026, will add Digital Asset Holdings as the fourth participant. Digital Asset offers the Canton Network platform built specifically for institutional finance. The trial will run until the end of September 2026.
The project is part of the Financial Services Agency (FSA) of Japan's payment innovation project, which selected the grant initiative in February 2026. That choice followed Japan's attempt to modernize its financial market infrastructure using ledger technology.
Essentially, the PoC tests whether rights in JGBs transferred under Japan's Corporate Bonds and Shares Book Entry Act can be transferred via blockchain without losing their legal status under current Japanese law. Participants ensure that changes to book entry transfer records can occur in real time within a multi-institution account structure.
The four partners envisioned moving JGB's warranty posting and replacement from an off-hours process to an around-the-clock process. Domestic and cross-border transactions are in scope, covering clearing houses, institutional investors, clients and agents.
JSCC President and CEO Isao Hasegawa will lead the refining corporation's involvement. Mizuho is led by President and Group CEO Masahiro Kihara and Nomura is led by Deputy CEO and President Kentaro Okuda, each bringing institutional market infrastructure to the test environment. Yuval Ruz, CEO of Digital Asset, oversees the technology layer.
Canton's network provides privacy-preserving capabilities that allow institutions to transact without sharing all information on a public ledger. That structure meets the compliance requirements that major financial institutions face when holding sovereign debt instruments.
Japanese financial regulators have watched American activity in this area closely. The Depository Trust and Clearing Corporation similarly investigated the use cases of bonds for US Treasuries through the Canton Network. JSCC is the first global participant in DTCC's Digital Launchpad Sandbox in 2024, with both organizations conducting research on the subject in collaboration with JPX, JSCC's parent company.
JGBs are considered high quality qualified securities by institutional investors worldwide. Ensuring access and liquidity in digital asset markets is a priority for Japan's financial authorities.
The PoC also assesses whether internal rules and regulations in each institution need to be amended to support business operations. No commercial launch date has been set and participants said any next steps would depend on the findings during the trial.
Mizuho and Nomura have separately participated in other JFSA Payment Innovation Project initiatives, including a stablecoin-based escrow pilot. That parallel work mirrors how Japan's major financial institutions are running multiple blockchain experiments simultaneously under regulatory oversight.
Expected operational benefits include lower administrative costs for collateral management, reduced manual processing associated with posting and replacing workflows, and improved coordination between digital-native assets held by JGBs and similar institutions.
The results of the PoC will be used to assess what regulatory adjustments, system improvements and regulatory changes are needed before any commercial deployment. The trial does not guarantee live production, but is a direct step by Japan's clearing and banking sector towards onchain government bond securities management.
