Japan FSA pushes blockchain adoption across financial infrastructure

Japan’s Financial Services Agency has made the adoption of blockchain-based on-chain finance a policy priority for its 2026 program year, with plans covering payments, securities settlement, tokenization and cross-border transfers. Summary Japan’s FSA has made on-chain finance a 2026 policy priority covering payments, securities settlement and tokenized assets. The regulator plans to launch an On-chain Finance Forum for the AI Era to examine technical, regulatory and supervisory issues. Japan will explore blockchain use in cross-border payments and work with market participants on faster securities settlement. The policy calls for public and private sector testing while maintaining user protection and financial system stability. The Financial Services Agency outlined the direction in its 2026 Strategic Priorities published on Sept. 15, setting out how it plans to respond to changes in financial markets driven by blockchain and artificial intelligence. The policy calls for public and private sector testing of on-chain systems while regulators examine the technology, legal framework and supervisory issues involved. The FSA said the work would be carried out while maintaining user protection and financial system stability. Japan’s government had already placed on-chain payments and investment in financial infrastructure within a financial strategy adopted in July. The strategy is intended to encourage investment in targeted industries and support Japanese companies seeking to restructure or reorganize their businesses. The FSA said it would now work on implementing measures included in that government strategy, including the use of blockchain alongside existing financial infrastructure. Japan FSA plans on-chain finance forum Blockchain and AI are changing how financial transactions can be processed, according to the FSA, which said combining new systems with existing infrastructure could improve areas such as fund transfers and securities settlement. One part of the work will involve establishing 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. 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 groups are expected to consider technical, regulatory and supervisory questions surrounding the technologies. You might also like: Japan finance firms add AI translation and QR payments The FSA 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. Four Mitsubishi UFJ Financial Group companies began testing JGB repos on the Canton Network in August, with the proof of concept examining automated processing and 24-hour settlement. The project involves MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking and MUFG Bank, alongside Digital Asset and Progmat.