What the pilot will test
Canton Network is now being tested for one of the most important use cases in institutional finance: collateral management backed by Japanese government bonds.
Mizuho Financial Group, Nomura Holdings, Japan Securities Clearing Corporation, and Digital Asset have announced a joint proof of concept focused on using Canton Network to support digital collateral workflows for JGBs.
The pilot will examine whether blockchain infrastructure can work alongside Japan’s existing market systems to make collateral management faster, more flexible, and more efficient. The core objective is to test whether JGB-related rights transfers and account updates can be processed more smoothly in a digital environment while preserving the legal nature of the securities themselves.
Digital Asset will support the integration of Canton Network with the systems used for JGB management. The goal is to explore whether collateral transactions can move in real time, 24 hours a day, 365 days a year, across both domestic and cross-border markets.
That is what makes this announcement stand out. This is not a pilot centered on speculative assets or retail experimentation. It is focused on sovereign debt, regulated financial infrastructure, and the operational flow of collateral between major market participants.
The scope includes use cases involving clearing institutions, institutional investors, clients, and agents, with both Japanese and international transaction scenarios under review. The participants will also assess the legal and operational feasibility of the model, including how it fits within Japan’s existing book-entry transfer framework and related regulations.
Why JGB collateral matters
The broader significance is clear. JGBs are already viewed as high-quality collateral by institutional investors. If blockchain infrastructure can improve how that collateral is mobilized, updated, and transferred, it could reduce operational friction, improve efficiency, and strengthen the role of JGBs in increasingly digital financial markets.
For Canton Network, this is another meaningful signal of where adoption is heading. The network continues to be used for practical institutional workflows tied to real assets, real market structure, and real financial infrastructure.
Next steps
If successful, the pilot could help expand the use of JGBs across domestic and international markets, improve collateral mobility, and support the modernization of Japan’s financial system.
The initiative is also being carried out as part of a broader proof of concept supported by Japan’s Financial Services Agency through its Payment Infrastructure Project.
