Source: Token Dispatch; Author: Vaidik Mandloi; Compiler: BitpushNews

Cryptocurrency’s most important infrastructure wins are happening within traditional finance.

On a Saturday in August 2025, something happened that should have sent every cryptocurrency group on the internet into a frenzy. Bank of America, Citadel Securities, Depository Trust and Clearing Corporation (DTCC), and Societe Generale settled a U.S. Treasury repurchase (repo) transaction in real time via blockchain over the weekend.

To make it easier to understand, repos are one of the most basic transactions in institutional finance: one party sells a government bond to another party with an agreement to buy it back the next day, usually to raise short-term overnight cash.

This is the "pipeline" of the financial system. Banks, hedge funds and central banks use repos every day to manage liquidity, with trillions of dollars flowing in this market. This is the first time in history that such transactions have achieved near-instantaneous atomic settlement on the blockchain outside market business hours, and all participants are the world's largest financial institutions.

Eight months later, on April 20, 2026, Japan’s central clearinghouse JSCC, Mizuho Financial Group, Nomura Holdings, and Digital Asset launched a proof-of-concept (PoC) to move Japanese Government Bonds (JGBs) as collateral onto the Canton Network chain.

JGB is one of Asia's most important financial instruments, with a circulating value of over US$9 trillion, and is the most widely used single collateral asset in the region's institutional markets. JGB is often the first choice when banks and hedge funds across Asia need to insure their leveraged positions. Now, the entire collateral system is migrating to the chain.

This may well be the biggest blockchain news of 2026.

This article will analyze why JGB is the best asset to tokenize first, why Canton Network continues to win institutional orders as public chains compete for retail traffic, and how “round-the-clock” collateral settlement is changing global trading desks.

Why JGB? Why now?

For decades, Japan has tried to make the yen the global reserve currency, but that wish has never really materialized. Even today, the yen only accounts for about 4-6% of global reserves, lagging behind the dollar, euro and even the pound.

But in the process, something unexpected happened: Japanese government bonds became one of the fastest-growing collateral assets on the Euroclear Collateral Highway (the infrastructure for moving collateral between large global financial institutions). Foreign ownership of JGB has climbed to about 11.9%, or about 144 trillion yen held by institutions outside Japan.

In institutional finance, collateral is everything. Every leveraged position, every derivatives trade, every repurchase requires high-quality assets as collateral. JGB is supported by the world's third largest economy and has basically no default risk. It is one of the few assets in the world that meets the standards. JGB is often used as collateral when hedge funds in Singapore build leveraged positions, or banks in London cover derivatives exposures.

Cryptocurrency’s most important infrastructure wins are happening within traditional finance. With Japan never winning the “currency war,” the JGB has become the operational infrastructure for institutional finance in Asia.

The problem is that the whole collateral system still works like it’s 1995. The transfer of JGB collateral between the two institutions goes through a tiered holding structure: the Bank of Japan (BOJ) at the top, then Hofuri (the Japanese Securities Depository), then the custodian bank, then the sub-custodian bank. Each tier requires separate reconciliation and operates only during Tokyo business hours (approximately 9am-3pm JST).

A collateral transfer that was supposed to take seconds ended up taking days. During these days, these collaterals are in "frozen" status. A trading desk in New York that needs to use it at 10pm has to wait until Tokyo wakes up. A study by GFMA (Global Financial Markets Association) and the Boston Consulting Group (BCG) estimates that blockchain can release $100 billion in stuck collateral worldwide; for a bank with a daily repurchase volume of $100 billion, tokenized settlement can save $150 million to $300 million annually in operating costs alone.

Here is something that makes Japan uneasy: the United States has already taken action.

DTCC, which hosts $99 trillion in U.S. securities and processes $3.7 quadrillion in transactions annually, has partnered with Digital Asset in December 2025 to tokenize U.S. Treasury bonds on the Canton Network. This means the core of U.S. securities infrastructure is moving toward 24/7 tokenized settlement.

Broadridge already processes $354 billion in daily tokenized Treasury repurchase transactions on the same network; JPMorgan’s Kinexys has processed more than $1.5 trillion in cumulative transaction volume through its on-chain payment path. U.S. Treasuries are rapidly becoming “ready to go, ready to move” collateral assets, while JGB remains locked away during office hours in Tokyo.

If you were a global fund manager and needed to provide collateral for a margin call at 2am, and if you had the choice between tokenized Treasuries that settle instantly, or JGBs that cannot be moved until Tokyo opens in 6 hours, I believe you would choose Treasuries every time.

If this choice is scaled up to thousands of trading desks, JGB risks losing its "top collateral" status. For a country whose sovereign bonds are deeply intertwined in Asia's financial collateral system, it's even an existential question. The four companies participating in the JGB on-chain trial used the word “urgent” in press releases. Given the pace at which America's infrastructure is evolving, it's hard not to agree.

Why Canton keeps winning

When Japan’s JSCC had to choose a network for JGB collateral, they chose Canton – the exact chain DTCC, Broadridge and JPMorgan were already using. The reason is that sovereign bond collateral has extremely demanding requirements on the network.

Sovereign bond collateral has a specific set of needs that most blockchains cannot meet. When Mizuho transfers JGB collateral to counterparties in London, the transaction must comply with Japan's Book-Entry Transfer Act. The blockchain records need to be legally synchronized with Hofuri’s official register.

Each party in a transaction (from clearing house to custodian to counterparty) can only see the data that it is authorized to see under Japanese and international securities laws. And the whole process requires atomic settlement, that is, the collateral and the payment must move at the same instant, otherwise neither moves.

This is an extremely complex set of constraints. Canton was chosen because its architecture was designed to solve these problems. Each institution runs its own ledger, and cross-institutional transactions only synchronize data that each party has permission to see. Smart contracts written in Digital Asset's Daml language stipulate who can see what and who must authorize each step.

So when the JSCC, Mizuho and Nomura did the JGB collateral transfer on Canton, the clearing house saw the whole picture, Mizuho saw its side, Nomura saw its side, and no one saw anything they weren't supposed to see. Canton is now the only network in the world that allows the three major sovereign bond collateral pools (U.S. debt, Japanese debt, and European debt) to move freely across borders in real time and 24/7. No other network, public or private, comes close to this.

What exactly does “all-weather” collateral change?

Most reports about tokenized on-chain settlement stop at “it’s faster.” But speed is just the beginning; the real change lies in how systems behave under stress.

Think about what happened in March 2020 during the COVID-19 pandemic. Markets crashed, volatility spiked, and initial margin requirements for stock futures jumped 100% in a matter of weeks. Funds unable to meet margin calls were forced to sell assets to raise cash.

But selling assets in a falling market can push prices lower, prompting more margin calls, which in turn forces more selling. This feedback loop is one of the most dangerous dynamics in finance and nearly brought down the system again during the UK LDI pension crisis in September 2022.

How 24/7 tokenized settlement changes this:

1. Direct mortgage: Currently, when facing a margin call, most funds must first sell assets for cash. With on-chain collateral, funds can directly pledge JGB or U.S. Treasuries to meet requirements without first converting to cash. The “forced selling cycle” then weakens, as fewer institutions dump assets into a declining market simply for liquidity.

2. Solving the "give first, get later" problem: In traditional repo, the cash lender sends the money first and then receives the collateral. During this window, one party is exposed. Banks will factor this "intraday exposure" into their haircuts and funding costs.

3. Atomic Execution: With on-chain atomic settlement, both ends of the transaction (collateral and cash) move in the same instant. Santander tested this in December 2024, executing a $50 million and €50 million intraday buyback on JPMorgan’s Kinexys, which automatically closed the position after three hours. Intraday buybacks, which once required complex third-party setups or committed credit lines, are now routine.

More significantly, in a January 2026 Canton presentation, London Stock Exchange Group (LSEG) brought its Digital Clearing House (DiSH) to trading. DiSH uses tokenized commercial bank deposits as the cash side, rather than stablecoins.

This is because banks will not use USDC to settle billion-dollar transactions - USDC is a private IOU, not "money good." DiSH tokens represent actual deposits from regulated banks and can be transferred on-chain 24/7. This solves the problem on the cash side, the final piece of the puzzle for institutional adoption. Now, Japan is looking to plug JGB into this same infrastructure.

What does this mean

If the JGB trial is successful, and US bonds are already on the line, and European sovereign bonds are in the demo, then Canton is starting to look like the next SWIFT in my opinion.

This is a single network that is becoming the default layer for the cross-border movement of the world’s most important collateral. Just like SWIFT, once enough institutions join, exit becomes almost impossible. Network effects compound interest. Each new category of sovereign bonds added benefits existing players and makes it harder for latecomers to compete.

I think this is worth pondering. We’ve spent years in crypto arguing about decentralization, worrying about single points of failure, and building a system where no single entity can control the trajectory. And now, the most significant blockchain deployments in history are converging on a single permissioned network managed by the same institutions that run global finance.

Is it good or bad? It depends on what you think the meaning of it all is. If the goal is to make capital markets more efficient, reduce settlement risk, and free up hundreds of billions of locked-up collateral, then it's working. If the goal is to reduce the power of existing financial institutions, it does exactly the opposite—the original gatekeepers are simply replaced with more advanced infrastructure.

I don't think that makes it any less important. Completing government bond settlement in a blockchain, 7×24 hour, cross-border, atomized settlement financial system is a real upgrade to the way global finance operates. But I do think it's worth being honest about "what" upgrade this is - it's an efficiency revolution: the pipes are rebuilt, but the plumbers are still the same.