Japan’s financial regulator is betting that blockchain and artificial intelligence will reshape how money and securities move through the country’s markets. The Financial Services Agency has confirmed that Japan on-chain finance policy will sit at the center of its 2026 program year, with plans stretching across payments, securities settlement, tokenized assets and cross-border transfers. The announcement, published in the agency’s 2026 Strategic Priorities on September 15, signals one of the most concrete regulatory pushes yet toward folding blockchain rails into Japan’s mainstream financial system.
Key takeaways
- Japan’s FSA has named blockchain-based on-chain finance a 2026 policy priority, covering payments, securities settlement and tokenized assets.
- The regulator plans an “On-chain Finance Forum for the AI Era” to work through technical, regulatory and supervisory questions with industry participants.
- Four Mitsubishi UFJ Financial Group companies began testing Japanese government bond repos on the Canton Network in August.
- Japan enacted legal amendments in July classifying cryptocurrencies as financial products, followed by a new Cryptocurrency and Stablecoin Division at the FSA in August.
- SBI Global Asset Management, DigiFT and the Solana Foundation moved forward with tokenized fund launches and a strategic partnership in July.
Japan’s FSA Prioritizes On-Chain Finance for 2026
The FSA’s strategic priorities document lays out how the agency intends to respond to shifts in financial markets driven by blockchain and artificial intelligence. At its core is a plan for public and private sector testing of on-chain systems, paired with regulatory review of the technology, legal frameworks and supervisory gaps involved. The agency was explicit that this work has to happen while maintaining user protection and financial system stability, a signal that Tokyo wants innovation without loosening the guardrails that keep depositors and investors safe.
This isn’t happening in isolation. Japan’s government had already placed on-chain payments and financial infrastructure investment inside a broader financial strategy adopted in July, aimed at channeling capital toward targeted industries and helping Japanese companies restructure. The FSA now says it will implement measures from that strategy, including blending blockchain with the financial infrastructure that already exists.
Part of that groundwork involves legal classification. Japan enacted amendments in July that formally classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act. That change opens a legal pathway for further shifts touching crypto taxation, investment products and market conduct rules — the kind of scaffolding regulators typically need before they can green-light broader institutional use of digital assets.
Government-Industry Collaboration and Testing Initiatives
Turning policy language into working systems means getting banks, exchanges and regulators into the same room, and Japan’s FSA is setting up several venues to do exactly that. The agency plans to establish an On-chain Finance Forum for the AI Era, where officials and industry players will examine how on-chain finance can actually be put to practical use rather than staying theoretical.
Two other bodies will hold discussions alongside the main track: the Study Group on Digital and Decentralized Finance and the Study Group on Promoting the Sound Use of AI and Related Technologies. Both are expected to dig into technical, regulatory and supervisory questions tied to blockchain and AI adoption. The FSA said the process will rely on demonstrations and back-and-forth between public and private participants to surface unresolved issues before infrastructure gets built for real usability and competitiveness.
MUFG’s JGB Repo Blockchain Settlement Testing
Some of that testing is already underway. Four Mitsubishi UFJ Financial Group companies — MUFG, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust and Banking and MUFG Bank — began testing Japanese government bond repos on the Canton Network in August, working alongside Digital Asset and Progmat. The proof of concept is examining automated processing and 24-hour settlement, and it was selected for the FSA’s Payment Innovation Project, a regulatory initiative built specifically to test blockchain-based payment and settlement systems.
Tokenized Asset Projects and Strategic Partnerships
Alongside regulatory developments, private financial groups have also been active. In July, SBI Global Asset Management partnered with DigiFT to launch a tokenized Japanese equity fund on Solana, giving institutional and accredited investors blockchain-based exposure to a high-dividend Japanese equity strategy. Days earlier, SBI Holdings and the Solana Foundation had formed a strategic partnership targeting stablecoins, tokenized assets, payments and institutional blockchain services across Japan and other Asian markets. As part of that deal, the Solana Foundation was slated to enter SBI R3 Japan — a joint venture between SBI and Sumitomo Mitsui Financial Group — with the firm intending to adopt the name SBI Solana Global once the necessary corporate steps are finalized.
Enhancing Cross-Border Payments and Securities Settlement
Beyond domestic infrastructure, Japan’s on-chain finance push extends outward: the FSA wants blockchain to speed up cross-border payments and help modernize how securities settle. Officials plan to work with market participants on shortening and upgrading securities settlement timelines while weighing further development of asset tokenization. That matters because Japan currently settles domestic stock transactions on a T+2 basis, while government bond transactions generally settle the following business day — timelines regulators believe blockchain infrastructure could compress.
A related policy thread involves cross-border payments, with Japan planning to host “Asia Day 2027” during Japan Fintech Week from February to March 2027, centered on digital finance and improvements to cross-border transfers, including on-chain solutions. The initiative is meant to bring together public and private sector participants from across Asia to discuss how regional payment corridors might evolve.
Japanese banks have already turned payment infrastructure into a focal point for blockchain initiatives, as MUFG Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank prepare to conduct joint stablecoin transactions under a common framework, with launch activity expected in fiscal 2026, ending in March 2027.
Integrating AI into Financial Services and Supervision
Blockchain isn’t the only technology reshaping the FSA’s agenda — artificial intelligence sits right alongside it. The regulator said AI technology, including AI agents, could support financial services beyond simple operational efficiency, potentially letting institutions offer products carrying more value for users. That framing suggests Tokyo sees AI less as a back-office tool and more as something that could actively shape what financial products look like going forward.
The agency plans to examine how supervision of markets and financial institutions should adapt as AI adoption increases, calling for stronger support for sound AI use while accounting for the risks that come with it. This is one of the clearer signals that Japan’s on-chain finance policy isn’t operating in a silo — regulators are treating blockchain and AI as connected forces that will require coordinated oversight rather than separate rulebooks. The government’s July financial strategy had already placed this work inside a broader plan to direct more capital toward growth investment and strengthen the financial infrastructure underpinning Japan’s economy.
Establishment of Dedicated Division for Digital Assets Oversight
Institutional structure is following policy intent. The FSA established a standalone Cryptocurrency and Stablecoin Division in August, consolidating oversight of digital assets, innovation efforts and digital payment planning into a single department. That restructuring came directly after the July legal amendments that classified cryptocurrencies as financial products, forming a two-step sequence: first the legal foundation, then the administrative body built to enforce and refine it.
Taken together, the legal reclassification and the new division suggest Japan is trying to avoid the fragmented oversight that has complicated digital asset regulation in other markets. Whether that consolidated approach proves effective will likely depend on how quickly the FSA can translate its forum discussions and pilot testing into concrete rules — something the agency has signaled it intends to pursue through ongoing demonstrations rather than a single sweeping mandate.
FAQ
What is the Japan Financial Services Agency’s 2026 priority regarding blockchain?
The FSA has made blockchain-based on-chain finance a priority in 2026, covering payments, securities settlement, tokenized assets, and cross-border transfers.
What collaborative initiatives are underway for blockchain testing in Japan?
Public and private sector collaborations include MUFG’s testing of JGB repos on the Canton Network and the establishment of an On-chain Finance Forum to address technical and regulatory issues.
How is Japan addressing the regulation of cryptocurrencies and digital assets?
In July, Japan amended financial laws to classify cryptocurrencies as financial products, and the FSA created a dedicated Cryptocurrency and Stablecoin Division in August to supervise digital assets.
What role does AI play in the FSA’s financial infrastructure plans?
The FSA plans to consider AI technologies, including AI agents, for enhancing financial services and will evaluate necessary supervision adjustments as adoption grows.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
