JSCC confirms PoC to enhance collateral management through Canton Network
21 April 2026 Japan
Image: Andrii_Yalanskyi/stock.adobe.com
Mizuho Financial Group, Nomura Holdings, Japan Securities Clearing Corporation (JSCC), and Digital Asset Holdings have announced the joint launch of a proof-of-concept (PoC) trial to enhance collateral management by using the Canton Network.
The PoC focuses on Japanese government bonds (JGBs) for which rights are transferred under the BookEntry Transfer Act.
The project will verify, from both legal and practical perspectives, whether the transfer of rights and updates to book-entry transfer records within a hierarchical structure involving multiple account management institutions, can be executed using blockchain technology.
By integrating existing systems with the blockchain infrastructure on Canton, the PoC will evaluate the feasibility of achieving sophisticated, real-time collateral transactions 24/7, while maintaining the legal status of JGBs under the Book-Entry Transfer Act and the Financial Instruments and Exchange Act.
It will also cover cross-border transactions involving stakeholders in and outside Japan.
The PoC will verify use cases involving the transfer of collateral among various entities, including clearing houses, institutional investors, clients, and agents.
Further, the project aims to incorporate the relationship with various laws and regulations into its scope of consideration; examine the necessity of amending relevant internal rules and regulations; and consider functional improvements required for commercialisation.
Achieving digital collateral management for JGBs — which are highly regarded as eligible collateral by institutional investors both in and outside Japan — has become an urgent priority, the firms say.
They add that maintaining and strengthening the availability and liquidity of JGBs in the digital space is essential to the development of financial markets and the improvement of investor convenience.
By combining existing infrastructure with blockchain technology for JGB management, the JSCC says it aims to enable 24/7 real-time collateral transactions and significantly improve the efficiency of collateral management for trade not only within Japan but on a cross-border basis.
The substantial reduction in administrative tasks related to the posting and substitution of collateral is expected to improve operational efficiency and reduce costs for both financial institutions and investors.
Furthermore, by enabling JGBs to be managed on a blockchain, the group aims to deepen coordination with other digital assets, including digital-native ones, thereby creating value through new types of financial transactions.
The JSCC adds: “Through these initiatives, we intend to solidify JGBs’ position in the digital world.
“By reducing administrative costs and enhancing the sophistication of collateral management, we will contribute to the expanded utilisation of JGBs by institutional investors in and outside Japan and strengthen the international competitiveness of the Japanese financial market.”
The PoC focuses on Japanese government bonds (JGBs) for which rights are transferred under the BookEntry Transfer Act.
The project will verify, from both legal and practical perspectives, whether the transfer of rights and updates to book-entry transfer records within a hierarchical structure involving multiple account management institutions, can be executed using blockchain technology.
By integrating existing systems with the blockchain infrastructure on Canton, the PoC will evaluate the feasibility of achieving sophisticated, real-time collateral transactions 24/7, while maintaining the legal status of JGBs under the Book-Entry Transfer Act and the Financial Instruments and Exchange Act.
It will also cover cross-border transactions involving stakeholders in and outside Japan.
The PoC will verify use cases involving the transfer of collateral among various entities, including clearing houses, institutional investors, clients, and agents.
Further, the project aims to incorporate the relationship with various laws and regulations into its scope of consideration; examine the necessity of amending relevant internal rules and regulations; and consider functional improvements required for commercialisation.
Achieving digital collateral management for JGBs — which are highly regarded as eligible collateral by institutional investors both in and outside Japan — has become an urgent priority, the firms say.
They add that maintaining and strengthening the availability and liquidity of JGBs in the digital space is essential to the development of financial markets and the improvement of investor convenience.
By combining existing infrastructure with blockchain technology for JGB management, the JSCC says it aims to enable 24/7 real-time collateral transactions and significantly improve the efficiency of collateral management for trade not only within Japan but on a cross-border basis.
The substantial reduction in administrative tasks related to the posting and substitution of collateral is expected to improve operational efficiency and reduce costs for both financial institutions and investors.
Furthermore, by enabling JGBs to be managed on a blockchain, the group aims to deepen coordination with other digital assets, including digital-native ones, thereby creating value through new types of financial transactions.
The JSCC adds: “Through these initiatives, we intend to solidify JGBs’ position in the digital world.
“By reducing administrative costs and enhancing the sophistication of collateral management, we will contribute to the expanded utilisation of JGBs by institutional investors in and outside Japan and strengthen the international competitiveness of the Japanese financial market.”
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