Nomura Research Institute Issues Digital Bond Using Blockchain, Explores Improved Settlement Methods

Nomura Research Institute (NRI) has completed a Yen 3 billion ($20 million) digital bond issuance on BOOSTRY’s blockchain platform, marking a significant advancement in digital securities settlement in Japan. The Friday issuance focused primarily on exploring improved settlement mechanisms, particularly delivery versus payment (DvP) – a transaction method ensuring securities are transferred only when payment occurs.

While Japan’s digital securities market has flourished, it has concentrated primarily on tokenized real estate rather than bonds. This latest NRI bond issuance represents an important shift in the market’s development trajectory.

Conventional wholesale bonds in Japan typically settle through the Japan Securities Depository Center (JSDAC), which supports DvP settlement. Digital bonds, operating outside JSDAC’s framework, have historically lacked DvP capabilities, creating higher settlement risk compared to traditional bonds.

To address this limitation, NRI partnered with SMBC bank to issue and settle the digital bond against conventional deposits, achieving T+1 DvP settlement – three days faster than JSDAC’s standard timeframe for new issuances.

Beyond the main issuance, the project included a proof-of-concept simulation using the DCJPY platform for digital currency settlement with tokenized deposits. While DCJPY has entered production with multiple banks participating in working groups, implementation remains limited. Currently, GMO Aozora Net Bank appears to be the only institution actively using tokenized deposits for transactions, specifically for renewable energy certificate-like instruments.

“In this project, the settlement risks for digital bonds were successfully reduced, which represents a major breakthrough,” stated a Nomura Securities spokesperson. “The project was also an opportunity to deepen our understanding of digital currencies as a new settlement tool that will enhance user convenience.”

While connecting BOOSTRY’s ‘iBet for Fin’ platform with the DCJPY platform remains under consideration, several challenges must be addressed first. Key obstacles include investment justification for banks, regulatory clarity requirements, and integration complexities.

These implementation barriers are common in the banking sector’s digitalization efforts. Meanwhile, stablecoins face fewer adoption hurdles, potentially allowing them to achieve mainstream payment adoption before banks fully embrace tokenization for payment systems.

In related developments, BOOSTRY announced today that its platform supported another tokenized real estate issuance. This represents the tenth issuance on the Alterna platform developed by Mitsui & Co Digital Asset Management (Mitsui), which enables direct public sales of real estate security tokens.

The latest tokenization involves four apartment buildings used by Gakugei University, with trust services provided by Shinsei Trust – marking the institution’s first involvement with digital securities. Additionally, SBI Shinsei Bank supplied a non-recourse loan to fund the security token project.

Ledger Insights Research has published a comprehensive report on bank-issued stablecoins and tokenized deposits, featuring more than 70 projects. Find out more here.

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