Japan’s FSA Makes On‑Chain Finance a 2026 Policy Priority

Japan’s Financial Services Agency (FSA) has elevated blockchain‑based on‑chain finance to a core element of its 2026 strategic priorities. The agency aims to integrate distributed‑ledger technology across payments, securities settlement, tokenised assets and cross‑border transfers.

Policy direction and governance

The FSA’s 2026 Strategic Priorities, released on September 15, outline a framework for public‑private testing of on‑chain solutions. The regulator will maintain user protection and financial‑system stability while examining technical, legal and supervisory issues.

On‑Chain Finance Forum for the AI Era

A new “On‑chain Finance Forum for the AI Era” will bring officials and industry participants together to discuss practical deployment of blockchain alongside artificial‑intelligence tools. Separate study groups on digital and decentralized finance and on the sound use of AI will address regulatory and supervisory questions.

Payments and settlement pilots

Four Mitsubishi UFJ Financial Group entities – MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking, and MUFG Bank – are testing Japanese government‑bond (JGB) repurchase agreements on the Canton Network. The proof‑of‑concept, selected for the FSA’s Payment Innovation Project, evaluates automated processing and 24‑hour settlement.

Tokenisation and securities infrastructure

The FSA plans to work with market participants to shorten settlement times and explore tokenised assets. Japan currently settles domestic equities on a T+2 schedule and government bonds on a next‑business‑day basis. A development plan for blockchain‑based settlement of listed stocks and bonds could be drafted in early 2027, with operational systems potentially emerging in the 2030s.

Private initiatives include a tokenised Japanese equity fund launched on Solana by SBI Global Asset Management and DigiFT, and a strategic partnership between SBI Holdings and the Solana Foundation focused on stablecoins, tokenised assets, payments and institutional blockchain services.

Cross‑border payments

The FSA will incorporate cross‑border payment discussions into “Asia Day 2027,” part of Japan Fintech Week (February–March 2027). Joint stablecoin transaction frameworks are being prepared by MUFG Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank, with live activity targeted for fiscal 2026 (ending March 2027).

Regulatory backdrop

In July, amendments to Japan’s financial laws classified cryptocurrencies as financial products under the Financial Instruments and Exchange Act, creating a legal path for changes to crypto taxation, investment products and market conduct. In August, the FSA established a dedicated Cryptocurrency and Stablecoin Division to oversee digital‑asset supervision, innovation and digital‑payment planning.

AI considerations

The agency will also assess how AI, including AI agents, can support financial services and supervision, balancing potential value‑added benefits with associated risks.