Japan Fintech Week underscored a crucial shift in financial markets: tokenization is no longer theoretical. My conversations at the event highlighted the growing importance of blockchain in institutional finance, particularly the debates surrounding tokenized deposits vs. stablecoins, the tokenization of real-world assets (RWAs) and the necessity of interoperable networks to connect fragmented digital asset ecosystems. These discussions align closely with the Canton Network’s core value proposition: providing a privacy-preserving, interoperable, regulatory-compliant infrastructure for institutional digital assets.

Major Themes

Digital Money: Tokenized Deposits vs. Stablecoins

Japan’s regulatory stance on digital money is transparent: stability, compliance and systemic security are paramount. Under new laws, stablecoins (classified as “electronic payment instruments”) must be fully reserve-backed and issued only by licensed banks, trust companies, or registered money transfer agents. This framework steers innovation toward bank-issued deposit tokens, ensuring that digital money maintains the trust and protections of the traditional banking system.

That said, there is growing interest in regulated stablecoins as well. SBI VC Trade recently became the first licensed firm in Japan to list USDC, marking a significant milestone for the domestic market. The listing reflects a measured yet growing demand for regulated access to widely used stablecoins. While Japan’s framework prioritises deposit-backed tokens for systemic integration, developments like these show pragmatism towards stablecoin inclusion, provided the operational and regulatory standards are met.

This careful approach contrasts with broader uncertainty surrounding stablecoins in other markets. For example, Europe’s ESMA recently issued guidance that may limit non-EU stablecoin providers from serving EU clients without strict controls. The result could be more geo-blocking, reducing access to non-EU services even when EU residents act on their initiative. By contrast, Japan’s approach offers clarity and structure, encouraging innovation within well-defined regulatory boundaries.

Tokenization of Real-World Assets (RWAs)

Beyond digital currency, tokenization was another central theme. The potential benefits are well understood. Enhanced liquidity, instant settlement and broader market access. Institutions are particularly interested in tokenizing bonds, equities, real estate, and carbon credits to streamline issuance and trading. However, a common challenge remains: tokenized assets risk being trapped in isolated networks without interoperability, limiting their full potential.

Projects like Progmat and BOOSTRY’s for ibet for Fin initiatives are already laying the foundation for digital securities markets in Japan. However, unlocking large-scale efficiencies depends on solving the interoperability problem, ensuring that different tokenized asset platforms can interact seamlessly.

Institutional adoption and the role of market infrastructure

Jörgen Krüger from Euroclear highlighted that the industry is moving from proof-of-concept to real-world deployment, focusing on creating trusted, scalable solutions for institutional adoption. Discussions at Japan Fintech Week reaffirmed this shift, as financial market infrastructures like Euroclear and the Canton Network play a critical role in bridging traditional and digital asset ecosystems. Regulatory frameworks and industry initiatives are actively shaping the commercialization of digital assets.

Euroclear’s involvement in initiatives such as GL1 and Project Guardian was a key topic at the event. GL1 is working toward a regulated environment for tokenized assets with a focus on interoperability and risk mitigation. Project Guardian, led by the Monetary Authority of Singapore, is actively exploring asset tokenization in regulated markets. The Canton Network complements these initiatives by offering a privacy-preserving infrastructure that ensures compliance and operational control for institutional players.

Canton Network’s role in Japan’s digital asset evolution

The Canton Network was a topic of interest among many institutional participants I came across pre- and post-event. The main point of interest was usually Canton’s unique ability to facilitate interoperability without sacrificing privacy or regulatory compliance.

In more detail, here are some of the ways Canton solves key challenges:

• Regulatory Compliance: Aligns with Japan’s preference for permissioned blockchain environments, ensuring all participants meet stringent financial regulations.
• Privacy & Security: Advanced privacy controls to ensure transaction data is only visible to relevant parties, addressing concerns about confidentiality in financial markets.
• Interoperability: Enables atomic transactions across different permissioned blockchain networks, eliminating the fragmentation that limits today’s tokenization efforts.

By eliminating reconciliation delays and improving collateral mobility, Canton can play a vital role in Japan’s financial infrastructure, helping institutions navigate the transition from traditional financial models to a digitally native future.

Let’s Build the Future Together

The signs across Japan are clear. Digital assets, tokenization and blockchain-based financial infrastructure are accelerating. The Canton Network is positioned to be a key enabler of this transformation, offering a scalable, interoperable and compliant solution for institutions navigating the evolving financial landscape.

If your organisation is exploring tokenized assets, digital currency, or ledger interoperability, connect with Taro and the Digital Asset team to discuss how the Canton Network can help you unlock these opportunities.