JSCC, Mizuho and Nomura to trial JGBs on blockchain

Japan Securities Clearing Corporation, together with Mizuho, Nomura and Digital Asset, has launched a proof-of-concept to use Japanese government bonds as collateral on a blockchain network. The effort was announced Monday in a joint statement and will test on-chain transfer and management on Digital Asset's Canton Network.

The trial will link existing systems across multiple institutions to see whether JGBs can be represented, moved and managed on a shared ledger while meeting Japan's financial instruments and exchange laws. The work will assess operational compatibility between current back-office and clearing systems and the distributed-ledger platform.

JSCC, a clearing house owned by Japan Exchange Group, is leading the project. Mizuho and Nomura will act as financial-market participants, and Digital Asset will supply the distributed-ledger infrastructure. The test will connect domestic clearing and custody processes to the Canton Network to evaluate how securities are handled when recorded on a shared ledger.

The trial is part of an initiative under the Financial Services Agency's Payment Innovation Project, which supports development of blockchain-based payment and settlement solutions. The companies will evaluate whether on-chain collateral processes can support faster margining and intraday liquidity management while operating within existing regulatory frameworks.

The firms noted growing activity abroad as a factor in starting the test. In the United States, the Depository Trust & Clearing Corporation has launched a limited pilot to place representations of U.S. Treasury securities on a blockchain. In South Korea, authorities and industry participants are running pilots that include blockchain-based deposit tokens and tokenized government bond transactions.

Participants said the trial will examine both domestic and cross-border scenarios involving clearing houses, institutional investors and other market participants. The scope includes testing messaging, settlement finality and recordkeeping functions, and how tokenized collateral would interact with custody and central clearing arrangements across jurisdictions.

No timetable for broader implementation was provided. The firms described the proof of concept as a step to identify technical and regulatory issues before any decision on production deployment. The trial joins other international experiments by clearing houses and financial institutions testing tokenized government securities within existing market infrastructures.