Japan's Financial Services Agency has made on-chain finance a 2026 policy priority covering payments, securities settlement, tokenization and cross-border transfers. According to reports from the FSA, the policy was outlined in its 2026 Strategic Priorities published on September 15, setting out how the regulator plans to respond to changes in financial markets driven by blockchain and artificial intelligence. The FSA said the work would be carried out while maintaining user protection and financial system stability.
The FSA plans to launch an 'On-chain Finance Forum for the AI Era' where officials and industry participants will examine how on-chain finance can be put into practical use. As reported by the FSA, separate discussions will take place through the Study Group on Digital and Decentralized Finance and the Study Group on Promoting the Sound Use of AI and Related Technologies. The agency said the process would involve demonstrations and discussions between public and private sector participants to identify unresolved issues before building financial infrastructure designed for usability and competitiveness.
Work on blockchain settlement is already underway in Japan, with four Mitsubishi UFJ Financial Group companies beginning testing JGB repos on the Canton Network in August. According to the FSA, the project involves MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking and MUFG Bank, alongside Digital Asset and Progmat. The project examines automated processing and 24-hour settlement and was selected for the FSA's Payment Innovation Project.
The FSA's policy extends beyond payment systems to securities infrastructure, with officials planning to work with market participants on shortening and upgrading securities settlement while considering the development of asset tokenization. As reported by the FSA, Japan currently settles domestic stock transactions on a T+2 basis, while Japanese government bond transactions generally settle on the following business day. In August, Japanese authorities were preparing to study blockchain settlement for listed stocks and government bonds, with an initial development plan potentially prepared in early 2027.
Cross-border payments will form another part of the FSA's on-chain work, with Japan planning 'Asia Day 2027' during Japan Fintech Week scheduled for February to March 2027. According to the FSA, the event will focus on finance in the digital era and form part of discussions on upgrading cross-border transfers. The regulator said AI technology, including AI agents, could support services beyond operational efficiency by allowing financial institutions to offer products with more value for users, with the agency planning stronger support for the sound use of AI while accounting for associated risks.
