Japanese banks and securities firms to launch 24/7 tokenized bond trading this year

A consortium of major Japanese banks and securities firms plans to introduce a 24/7 trading system for tokenized government bonds by the end of this year, Nikkei reported. The core of the initiative is to issue government bonds as blockchain-based digital securities, or security tokens, and settle transactions with stablecoins, enabling a shift from the current T+1 to a T+0 same-day settlement cycle. The initial focus will be the repo (repurchase agreement) market, which is valued at approximately $16 trillion as of the end of 2024, with Japan accounting for about 10% of the total. A development organization will be launched in May, centered around Progmat, a stablecoin platform under MUFG. Participants include Japan's three megabanks—Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank—as well as Tokio Marine Holdings, Daiwa Securities, SBI Securities, BlackRock Japan, and State Street.