Japan Securities Clearing Corporation (JSCC), a part of the Japan Exchange Group (JPX), announced on Monday that it will conduct a proof of concept with Mizuho Financial Group, Nomura Holdings, and Digital Asset to explore the use of Japanese government bonds as digital collateral on the Canton Network.
The project aims to assess the feasibility of transferring and managing Japanese Government Bonds (JGBs) on a blockchain platform while adhering to the legal requirements of the Book-Entry Transfer Act and the Financial Instruments and Exchange Act.
Additionally, the trial will evaluate whether integrating existing systems with Canton’s blockchain infrastructure can facilitate more advanced, real-time collateral transactions on a 24/7 basis, including cross-border scenarios.
The Financial Services Agency of Japan selected this initiative for support under its Payment Innovation Project in February, which is part of the FinTech PoC Hub, according to the announcement.
This trial will bring one of the largest sovereign bond markets into the ongoing discussion about the efficiency of moving collateral across digital market infrastructure without disrupting current legal and supervisory frameworks.
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The companies involved in the trial noted that the use of digital assets is gaining momentum in the United States and other markets, as well as in Japan, and the findings of the trial are expected to contribute to discussions on the potential use of JGBs in digital collateral processes, although no specific commercial rollout has been confirmed.
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Canton expands government bond tests
In a previous Canton pilot conducted in December 2025, tokenized US Treasuries were utilized as collateral in real time among major dealers and market participants, including Bank of America and Société Générale.
These tests highlighted the possibility of utilizing high-grade government securities on a blockchain platform among multiple participants, and the new JGB trial extends this approach to Japan’s government bond market.
Additionally, in February, the United Kingdom government selected HSBC’s Orion platform to host issuance for its Digital Gilt Instrument pilot within the Bank of England’s Digital Securities Sandbox as it explores distributed ledger technology for sovereign debt.
Cointelegraph reached out to JSCC and Digital Asset for comments, but had not received a response at the time of publication.
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