Why
Settlement delay is not a defect that nobody got around to fixing. T+2 buys something: the interval is where multilateral netting happens, and netting is what turns thousands of trades into a handful of obligations that actually move. Collapse the interval and the netting goes with it — every trade settles gross, and the cash and securities that netting used to cancel out now have to be present, in full, at the moment of the trade. T+0 does not remove the exposure; it converts it from credit risk into a liquidity requirement. That trade may well be worth making. It is simply not the trade the headline describes.
Which is why the BOJ current account is the real project. Settling securities around the clock requires a cash leg that also runs around the clock, and commercial bank money does not — so somebody has to put central bank money where the securities are. The BOJ said in March it was testing exactly that internally. Read in that order, the announcement is not we are speeding up settlement and will use a blockchain; it is we are putting central bank money on a ledger, and faster settlement is what it buys.
The cross-link is the part worth sitting with. This catalogue's event-contract-plumbing table put DvP in the free column — on chain, delivery and payment are one operation, so the gap simply does not exist. Japan is a G7 state scheduling most of a decade to acquire that same property, and the reason is not the ledger. It is netting, the cash leg, and the institutional division of labour, which is precisely the middle column of that table. The contract stack gets the easy half for free and still owes the hard half; the regulated stack already owns the hard half and is buying the easy one.
How it works
Two legs, and only one of them is the easy one
| Leg | Today in Japan | Under T+0 | What has to exist first |
|---|---|---|---|
| JGB delivery | T+1 | Instant | A ledger — genuinely the easy part |
| Equity delivery | T+2 | Instant | A ledger, plus corporate-action handling |
| Cash | Bank money, business hours | Must run 24 hours | BOJ current accounts on the ledger — the load-bearing item |
| Netting | A CCP nets many trades into few obligations | Gone; every trade settles gross | Intraday liquidity replacing what netting saved |
| Settlement risk | Lives in the T+1/T+2 gap | Absent | This is the headline benefit, and it is real |
The number the announcement does not carry
Gross obligations divided by netted obligations, for one trading day. That single multiple says what T+0 costs in liquidity, and it decides whether the design needs intraday credit, a liquidity-saving mechanism bolted back on, or nothing at all. Every real-time gross settlement system ever built has ended up adding some netting back — the question is never whether, it is how much and who funds it. cross-border-rail-interop measures the same quantity from the other direction, as the prefunded balances a corridor needs when payment-versus-payment is absent.
Reading the schedule with the provenance rule
Applying the status column from fork-date-provenance: confirmed — a study body launched this summer by the FSA, the Ministry of Finance, the BOJ and financial institutions. Planned — a concrete plan, covering blockchain design, role division and development schedule, as early as early 2027. Projected — operation as early as the early 2030s, and possible later extension to cross-border remittance. Only the first has happened. A four-to-six year gap between plan and operation is normal for settlement infrastructure and is not a sign of doubt; treating the last row as a date, however, is the error that column exists to catch.
Why it is worth a card for a prediction market
Because the same question arrives in miniature. A market that settles positions instantly has also given up netting between them, and the collateral it demands is gross by construction — which is the observation event-contract-plumbing already reached from the clearing side: a venue without a CCP has not solved counterparty risk, it has made every position fully collateralized instead. Japan is about to run that experiment at sovereign scale, in public, with published numbers. That is a rare thing to be able to watch.