Mizuho Financial Group, Nomura Holdings, and the Japan Securities Clearing Corporation (JSCC), together with Digital Asset, launched a pilot project to test Japanese government bonds (JGB) as collateral assets on the Canton Network.
JSCC, part of Japan Exchange Group (JPX), announced the launch of the pilot aimed at testing the use of Japanese government bonds as digital collateral within Digital Asset’s Canton Network.
The initiative is being carried out in collaboration with Mizuho Financial Group, one of Japan’s largest banking holding companies, and Nomura Holdings, a global financial group providing a wide range of services to corporate clients, government entities, institutional investors, and individuals. The initiative seeks to evaluate the feasibility of using JGBs as digital collateral for 24/7 collateral operations, including real-time cross-border transactions.
At the core of the project is the assessment of how rights to Japanese government bonds can be transferred and recorded within a blockchain infrastructure while preserving their legal status. Participants will test the integration of existing book-entry systems with the Canton Network to ensure seamless updates and collateral movement among various market participants, including clearing organizations, institutional investors, and their clients.
Particular attention will be given to scenarios where JGBs are used as collateral in cross-border transactions involving counterparties both within and outside Japan. The project also includes analysis of compliance with current regulatory frameworks, including financial instruments laws and rights registration requirements, as well as the need to adapt internal procedures of participating institutions.
The pilot project was selected in February 2026 to participate in the government’s Payment Innovation Project (PIP), launched by Japan’s Financial Services Agency (FSA) in November 2025. The use of blockchain technology is expected to significantly improve collateral management efficiency, reduce operational costs, and enable 24/7 access to collateralized transactions. It may also reinforce the role of Japanese government bonds as a key collateral instrument in the digital financial infrastructure and lay the groundwork for their integration with other digital assets.
Institutional interest in digital assets is growing in Japan. At the same time, authorities classified crypto-assets as financial instruments, while the central bank planned a series of technical trials for blockchain-based settlements in interbank securities transactions.
