Japan to study putting government bond transactions on blockchain

According to Business Recorder, Japan's Ministry of Finance said on Wednesday that it will set up a study group next month to explore whether Japanese government bonds, known as JGBs, could move to on-chain dealing built on blockchain technology. A senior ministry official outlined the group's remit at a briefing. It will weigh the likely advantages, costs and effects on the market of shifting such bond dealings onto blockchain rails.

Faster settlement is one of the features the official highlighted, and it could allow the bonds to be used immediately as collateral in repo transactions. The official presented this as one example of what on-chain functions might enable.

The study is at an early stage, as its purpose is to determine whether the change should go ahead. The item has no direct bearing on PSX-listed companies, though it shows how major bond markets are weighing digital settlement tools.