Japan Ministry of Finance to study on-chain government bonds

Japan's Ministry of Finance has announced the establishment of a study group to examine the on-chain implementation of government bonds. The group is scheduled to hold its first meeting on October 8, with the goal of organizing discussions between December 2024 and January 2027.

On-chain processing involves using blockchain technology to record and manage transactions and assets. Moving government bond settlements to a blockchain could potentially allow for instantaneous, 24/7 settlement, improving upon the current system where bond trades typically settle one day after execution.

The study group will consist of five academic and industry experts, with the Bank of Japan and the Financial Services Agency participating as observers. While the meetings will be closed to the public, the Ministry plans to release minutes and distributed materials at a later date.

This initiative aligns with broader government strategies to promote on-chain finance. The Financial Services Agency has also launched a forum to discuss the social implementation of on-chain finance and the use of AI in the sector, focusing on areas such as stablecoins, tokenized deposits, and the tokenization of various assets.