<div id="readability-page-1"><div><div><p>Source: Token Dispatch; Author: Vaidik Mandloi; Translation: BitpushNews</p><p>The most important infrastructure victory for cryptocurrency is happening within traditional finance.</p><p>On a Saturday in August 2025, something happened that should have driven every cryptocurrency group on the internet crazy. Bank of America, Citadel Securities, Depository Trust &amp; Clearing Corporation (DTCC), and Société Générale settled a U.S. Treasury repurchase agreement (repo) transaction in real time via blockchain over the weekend.</p><p>To put it simply, a repo is one of the most basic transactions in institutional finance: one party sells government bonds to another and agrees to buy them back the next day, usually to raise short-term overnight cash.</p><p>This is the &#34;pipeline&#34; of the financial system.</p><p>Banks, hedge funds, and central banks use repurchase agreements daily to manage liquidity, with trillions of dollars flowing through this market. For the first time ever, such transactions achieved near-instantaneous atomic settlement on a blockchain outside of market hours, with participants being some of the world's largest financial institutions. Eight months later, on April 20, 2026, the Japanese Central Clearing House (JSCC), Mizuho Financial Group, Nomura Holdings, and Digital Asset launched a proof-of-concept (PoC) to move Japanese government bonds (JGBs) as collateral onto the Canton Network blockchain. JGBs are one of Asia's most important financial instruments, with a circulating value exceeding $9 trillion, and are the most widely used single collateral asset in the region's institutional markets. JGBs are typically the first choice when banks and hedge funds across Asia need to provide collateral for their leveraged positions. Now, the entire collateral system is migrating on-chain. This could very well be the biggest blockchain news of 2026. This article will analyze why JGB is the most suitable asset for early tokenization, why Canton Network continues to win institutional orders in the competition for retail traffic among public chains, and how &#34;24/7&#34; collateral settlement is truly changing the global trading floor. Why JGB? Why now? For decades, Japan has been trying to make the yen a global reserve currency, but this aspiration has never truly materialized. Even today, the yen accounts for only about 4-6% of global reserves, lagging behind the dollar, the euro, and even the pound sterling. But in the process, something unexpected happened: Japanese government bonds became one of the fastest-growing collateral assets on the Euroclear Collateral Highway (the infrastructure for moving collateral between large global financial institutions). Foreign holdings of JGB have climbed to approximately 11.9%, or about 144 trillion yen, held by institutions outside Japan. In institutional finance, collateral is everything. Every leveraged position, every derivatives transaction, and every repurchase requires high-quality assets as collateral. Backed by the world's third-largest economy, JGB has virtually no default risk and is one of the few globally compliant assets. JGB is frequently used as collateral when Singaporean hedge funds establish leveraged positions or London banks cover derivatives exposure. The most important infrastructure victory for cryptocurrencies is happening within traditional finance. With Japan never winning the &#34;currency war,&#34; the JGB has become the operational infrastructure for institutional finance in Asia. The problem is that the entire collateral system operates in a manner stuck in 1995. Transfers of JGB collateral between two institutions require a multi-layered holding structure: at the top is the Bank of Japan (BOJ), then Hofuri (the Japan Securities Depository), followed by a custodian bank, and then a subordinate custodian bank. Each layer requires separate reconciliation and operates only during Tokyo business hours (approximately 9:00 AM to 3:00 PM JST). A collateral transfer that should take only seconds ends up taking days. During these days, the collateral is &#34;frozen.&#34; A trading desk in New York that needs to use it at 10:00 PM must wait until Tokyo wakes up. A study by the GFMA (Global Financial Markets Association) and the Boston Consulting Group (BCG) estimates that blockchain could unlock $100 billion in tied-up collateral globally; for a bank with daily buybacks of $100 billion, tokenized settlement could save $150 million to $300 million annually in operating costs alone. Here's something that's unsettling for Japan: the United States has already taken action. DTCC, which holds $99 trillion in U.S. securities and processes $3.7 quadrillion in transactions annually, partnered with Digital Asset in December 2025 to tokenize U.S. Treasury securities on the Canton Network. This signifies that the core of the U.S. securities infrastructure is moving towards 24/7 tokenized settlement. Broadridge already processes $354 billion in tokenized Treasury repurchase transactions daily on the same network; JPMorgan's Kinexys has processed over $1.5 trillion in cumulative transactions through its on-chain payment pathway. U.S. Treasury securities are rapidly becoming &#34;readily available and readily mobile&#34; collateral, while JGB remains locked into its Tokyo offices during office hours. If you're a global fund manager who needs to provide collateral for margin calls at 2 AM, and you have the choice between tokenized US Treasuries that settle instantly and JGB that takes six hours to move after the Tokyo market opens, I believe you'd choose US Treasuries every time. If this choice were amplified to thousands of trading desks, JGB would risk losing its &#34;top collateral&#34; status. For a country where sovereign bonds are deeply intertwined with the Asian financial collateral system, this is even a matter of survival. The four companies participating in the JGB on-chain trial used the word &#34;urgent&#34; in their press release. Given the speed of evolution of US infrastructure, it's hard not to agree. Why Canton Continues to Win When Japan's JSCC had to choose a network for JGB collateral, they chose Canton—the very chain already used by DTCC, Broadridge, and JPMorgan Chase. The reason lies in the extremely stringent requirements that sovereign bond collateral places on the network. Sovereign bond collateral has a specific set of requirements that most blockchains cannot meet. When Mizuho Bank transfers JGB collateral to its London counterparty, the transaction must comply with Japan's Book-Entry Transfer Act. The blockchain record needs to be legally synchronized with Hofuri's official register. Each party in the transaction (from the clearinghouse to the custodian to the counterparty) can only see the data they are authorized to view under Japanese and international securities laws. Furthermore, the entire process requires atomic settlement; that is, the collateral and payment must move at the same instant, or neither should move. This is an extremely complex set of constraints. Canton was chosen because its architecture was designed to solve these problems. Each institution runs its own ledger, and cross-institutional transactions only synchronize the data that each party is authorized to view. Smart contracts written in Digital Asset's Daml language specify who can see what and who must authorize each step. Therefore, when JSCC, Mizuho, ​​and Nomura transferred JGB collateral on Canton, the clearinghouse saw the whole picture, Mizuho saw its side, Nomura saw its side, and no one saw what they shouldn't have seen. Canton is now the only network in the world that allows the three major sovereign debt collateral pools (US Treasuries, Japanese Treasuries, and European Treasuries) to move freely across borders in real time, 24/7. No other network (public or private) comes close to this. What exactly has this &#34;24/7&#34; collateral changed? Most reports on tokenized on-chain settlement stop at the point that &#34;it's faster.&#34; But speed is just the beginning; the real transformation lies in how the system behaves under pressure. Consider what happened during the COVID-19 pandemic in March 2020. Markets crashed, volatility soared, and initial margin requirements for stock futures jumped by 100% within weeks. Funds unable to meet margin calls were forced to sell assets to raise cash. But selling assets in a falling market pushes down prices, triggering more margin calls, which in turn forces even more selling. This feedback loop is one of the most dangerous dynamics in finance, nearly bringing the system down again during the UK LDI pension crisis in September 2022. How 24/7 Tokenized Settlement Changes This: Direct Collateral: Currently, when faced with margin calls, most funds must sell assets for cash. With on-chain collateral, funds can directly collateralize JGB or US Treasury bonds to meet requirements without first converting them to cash. The &#34;forced sell-off cycle&#34; is thus reduced, as fewer institutions will dump assets into a falling market simply for liquidity. Solving the &#34;Give First, Receive Later&#34; Problem: In traditional repurchase agreements, the cash lender pays first and then receives the collateral. During this window, one party is exposed to risk. Banks will factor this &#34;intraday exposure&#34; into their haircuts and funding costs. Atomic Execution: Through on-chain atomic settlement, both ends of a transaction (collateral and cash) move at the same instant. Santander tested this in December 2024, executing a $50 million and €50 million intraday repo on JPMorgan's Kinexys, which was automatically closed out three hours later. Intraday repos, which once required complex third-party setups or committed credit lines, are now routine. More significantly, in a Canton demo in January 2026, the London Stock Exchange Group (LSEG) introduced its Digital Clearinghouse (DiSH) to trading. DiSH uses tokenized commercial bank deposits as the cash side, instead of stablecoins. This is because banks won't use USDC to settle billion-dollar transactions—USDC is a private IOU, not &#34;money good.&#34; DiSH tokens represent actual deposits in regulated banks and can be transferred 24/7 on-chain. This solves the cash side problem, the final piece of the puzzle for institutional adoption. Now, Japan is planning to integrate JGB into the same infrastructure. What does this mean? If JGB's trial is successful, and US Treasury bonds are already online, and European sovereign bonds are in demonstration, then in my view, Canton is starting to resemble the next SWIFT. This is a single network becoming the default layer for the most important cross-border movement of collateral globally. Like SWIFT, once enough institutions join, exiting becomes virtually impossible. Network effects generate compound interest. Every new class of sovereign bonds benefits existing players and makes it harder for newcomers to compete. I think this is something to think about. We've spent years arguing about decentralization in the crypto space, worrying about single points of failure, and building a system where no entity can control its trajectory. And now, the most important blockchain deployment in history is converging on a single permissioned network managed by the same group of institutions that run global finance. Is it good or bad? It depends on what you think it means. If the goal is to improve capital market efficiency, reduce settlement risk, and release hundreds of billions of dollars of locked collateral, then it is indeed working. If the goal is to weaken the power of existing financial institutions, then it is doing the opposite—the old gatekeepers have simply been replaced with more advanced infrastructure. I don't think this makes the issue less important. Settling government bonds on a blockchain, 24/7, cross-border, atomically settled financial system, is a real upgrade to how global finance works. But I do think it's worth being honest about exactly &#34;what kind&#34; of upgrade this is—it's an efficiency revolution: the pipelines have been rebuilt, but the plumbers are still the same people.</p></div></div></div>

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<p>Japan's bond market is set to transition fully to blockchain technology, with major financial institutions like Mizuho and Nomura launching a proof-of-concept to move Japanese government bonds (JGBs) onto the Canton Network. This shift aims to enhance the efficiency of collateral transfers, which currently face delays due to outdated systems. JGBs, valued over $9 trillion, are crucial in institutional finance, and their tokenization could unlock significant liquidity and operational savings. This development follows similar moves in the U.S. market, highlighting a global trend towards 24/7 tokenized settlement.</p>

Japan's bond market will be fully "on-chain".