Japan’s Financial Services Agency has made the adoption of blockchain-based onchain finance a policy priority for its 2026 program year, publishing plans that cover payments, securities settlement, tokenization and cross-border transfers in one of the most comprehensive regulatory endorsements of onchain infrastructure issued by a major economy.
The direction is laid out in the FSA’s 2026 Strategic Priorities, published on Sept. 15, which set out how the regulator plans to respond to changes in financial markets driven by blockchain and artificial intelligence. The policy calls for public and private sector testing of onchain systems while regulators examine the technology, legal framework and supervisory issues involved, with the FSA stressing that the work will be carried out while maintaining user protection and financial system stability.
The announcement builds on groundwork already laid by Japan’s government, which placed onchain payments and investment in financial infrastructure within a national financial strategy adopted in July. That strategy is intended to encourage investment in targeted industries and support Japanese companies seeking to restructure their businesses. The FSA will now work on implementing those measures, including the use of blockchain alongside existing financial infrastructure rather than as a wholesale replacement for it.
## New forums for an old question
Central to the plan is the establishment of an “On-chain Finance Forum for the AI Era,” where officials and industry participants will examine how onchain finance can be put to practical use. Separate discussions will run through the Study Group on Digital and Decentralized Finance and the Study Group on Promoting the Sound Use of AI and Related Technologies, each expected to weigh the technical, regulatory and supervisory questions the technologies raise.
The FSA said the process will involve demonstrations and discussions between public and private sector participants to identify unresolved issues before building financial infrastructure designed for usability and competitiveness. The emphasis on demonstrations before deployment reflects a regulator that wants to test its way into the technology rather than legislate first and debug later.
## Settlement is where the rubber meets the chain
Work on blockchain settlement is already underway in Japan. Four Mitsubishi UFJ Financial Group companies began testing Japanese government bond 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, and was selected for the FSA’s Payment Innovation Project, a regulatory initiative designed to test blockchain-based payment and settlement systems.
The FSA’s latest policy extends well beyond payment systems into securities infrastructure as regulators prepare for increased tokenization of financial assets. Officials plan to work with market participants on shortening and upgrading securities settlement while considering the development of asset tokenization. The current baseline shows the size of the opportunity: Japan settles domestic stock transactions on a T+2 basis, while Japanese government bond transactions generally settle on the following business day.
The ambition has been visible for months. In August, it emerged that Japanese authorities were preparing to study blockchain settlement for listed stocks and government bonds, in an initiative involving the FSA, the Ministry of Finance, the Bank of Japan and financial institutions. An initial development plan could be prepared in early 2027, while any operational system would potentially arrive during the 2030s, meaning the current policy work is explicitly multi-year.
## Private sector moving in parallel
Private financial groups have not waited for regulators. SBI Global Asset Management and DigiFT launched a tokenized Japanese equity fund on Solana in July, giving institutional and accredited investors blockchain-based access to a high-dividend Japanese equity strategy.
Days earlier, SBI Holdings and the Solana Foundation formed a strategic partnership focused on stablecoins, tokenized assets, payments and institutional blockchain services in Japan and across Asian markets. Under the agreement, the Solana Foundation was set to join SBI R3 Japan, a venture involving SBI and Sumitomo Mitsui Financial Group, with the company planning to change its name to SBI Solana Global after the required corporate procedures.
Cross-border payments will form another pillar of the FSA’s onchain work, with the regulator planning policy discussions involving public and private sector participants on how blockchain rails can compress the cost and latency of international transfers, long one of the most commercially promising applications of the technology.
## Why it matters
Japan is effectively codifying onchain finance into national financial policy, a position few major economies have taken so explicitly. By combining a regulatory sandbox, dedicated study groups, agency-level priority status and a pipeline of live institutional experiments, the FSA is constructing the full stack of conditions that tokenized markets need to move from pilot to production.
For global crypto and blockchain firms, the signal is that Japan intends to be a primary jurisdiction for institutional-grade onchain infrastructure, not a follower. For the country’s banks and brokers, the strategic priorities amount to a green light, with a regulator that has committed to testing the technology alongside them, on a timetable that starts now.
FSA putting payments, settlement AND tokenization in one policy program is a bigger deal than people realize. Japan has been quietly building the regulatory blueprint everyone else copies
japan writes the blueprint and everyone else copies it two years late, same as it was with the exchange licensing rules
public-private testing while regulators examine the tech is the right approach. Better than the US approach of suing first and asking questions later
sue first at least forced definitions fast. the japanese route is cleaner but first real settlement volume stays years out either way, pick your poison
the sue first approach did at least produce real case law. japas route is cleaner but slower, first meaningful tokenized settlement volume is years out either way
years out is fine, the point is the framework survives politics. the FSA actually finishes what it starts
they said the same about the 2020 reforms and it still took years for anything real to launch. the legal framework part is where this dies slowly
@yen_pragmatist fair but the stablecoin tokenized fund stuff already launched under those reforms. momentum is real this time
the 2020 reforms did eventually produce the tokenized fund wave though, just two years late. FSA slow means slow, not dead
the 2020 reforms did ship though, the security token rules gave us the tokenized fund wave by 2022. slow is annoying but the FSA finishes what it legislates
The FSA putting tokenization in the same program as payments and settlement means real budget behind it, not another study group.
study groups are exactly what killed the digital yen momentum. agreed, budget or nothing
the FSA running public-private demos before deployment is very japanese regulator. slow, then suddenly everyone complies and wonders why the west took so long
agreed, and the onchain finance forum for the ai era name tells you securities tokenization is the real target, payments are just the entry point
suddenly everyone complies is exactly right. look how fast the big banks moved once the security token rules landed in 2020
payments, settlement, tokenization and cross-border in one program. most regulators manage one of those per decade
@eurobison_ and the FSA actually publishes follow through reports, they did it for every phase of the 2020 reforms. makes the 2026 list credible
settlement and tokenization in one program the same week the US Senate failed its own vote. the regulatory gap is widening in one direction only
the july national strategy doing the groundwork before the FSA program lands is the actual story. regulators coordinating with cabinet level planning is rare anywhere
ai agents transacting onchain is listed in the priorities doc and nobody in the comments is talking about it. that is the clause banks will chase hardest
the ai agents clause buried deep in the priorities doc is the sleeper. banks want programmable settlement for machine to machine payments and that use case fits onchain rails perfectly
the ai agents clause is also the scariest one. programmable settlement for machines means the FSA has to write liability rules for non-human payments, that followup doc will be thick
liability for non human payments is genuinely uncharted, someone has to own a failed agent tx. curious if the forum drafts default rules or leaves it to case law like the US
fsa putting payments, settlement and tokenization in one 2026 program right after the july national strategy means cabinet and regulator are aligned. that coordination is rarer than any single rule
The 2020 security token rules took about two years to produce real products, so a 2026 program means actual flows around 2028. Fine, but let us not pretend this is fast