Japan's FSA Publishes On-Chain Finance Forum Minutes Stablecoin Subsidies and Tokenized JGBs Take Center Stage
Japan's Financial Services Agency (FSA) has published the minutes from the first meeting of its *Forum on On-Chain Finance in the AI Era*, held on September 30, laying out one of the most detailed roadmaps yet for putting Japan's financial system on-chain.
The forum is chaired by Japan's Minister of State for Financial Services and brings together the country's top financial architects: the Digital Agency, Ministry of Finance, Bank of Japan, and the Japanese Bankers Association. According to the minutes, the group plans to release an interim report and a public-private cooperation roadmap early next year.
Four Major Pillars Announced
1. Tokenized Government Bonds
The Ministry of Finance will convene an expert study group in October to examine *putting Japanese Government Bonds (JGBs) on-chain*. This follows tests by four MUFG group companies that began testing JGB repos on the Canton Network in August.
2. Programmable Public Funds via Stablecoins
The Digital Agency will study the technical use of *stablecoins and tokenized deposits to distribute public funds*, including a novel concept: restricting subsidies to specific purposes such as child-rearing and food. This is a direct use-case for programmable yen stablecoins, which only licensed banks, trust companies and money transfer providers can issue in Japan.
3. Bank of Japan's Settlement Sandbox
The Bank of Japan is developing a Distributed Ledger Technology (DLT) connectivity sandbox to test the use of its current account deposits for on-chain settlement essentially linking central bank money to blockchain rails. ab06
4. Next-Gen Interbank Infrastructure
The Japanese Bankers Association has established its own study group to discuss next-generation interbank settlement infrastructure, complementing the FSA's Payment Innovation Project that has already approved four stablecoin pilots including the megabank yen-stablecoin project by MUFG, Mizuho and SMBC.
The minutes also confirm a new international push: the FSA and Ministry of Finance will develop a policy dialogue framework for public and private sector participants in Asia and hold an "Asia Day 2027" meeting in February.
Why It Matters
This is not a standalone initiative. On September 15, the FSA made on-chain finance its top 2026 policy priority, covering payments, securities settlement, tokenization and cross-border transfers.
It comes just months after Japan's Diet passed a landmark law on July 15, 2026 moving crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), classifying them as financial products. The same reform paves the way for a 20% flat tax on crypto (down from 55%) and potential spot crypto ETFs a structure that could bring in ∼1 trillion yen in AUM according to Nikkei.
In short: Japan is not just regulating crypto, it is rebuilding its public finance plumbing bonds, subsidies, central bank settlement on chain, while keeping its core principle intact: innovation without loosening user protection and financial system stability.