Japan’s Ministry of Finance has provisionally divided plans to put government bonds on-chain into three models, including the potential issuance of a new type of bond on a blockchain outside the existing transfer-settlement framework. The Government Bond On-Chain Research Group held its first meeting on Oct. 8 after its establishment was announced on Sept. 30, with the Bank of Japan and Financial Services Agency participating in discussions. The ministry said the work could improve collateral and liquidity management and broaden overseas investor access, while posing risks including market fragmentation, price-volatility transmission and system-upgrade costs. Its materials also referenced overseas tokenization examples, including BlackRock’s BUIDL, with an outstanding balance of about $2.3 billion, and the UK’s DIGIT initiative. The classifications remain provisional as the ministry works toward a report by January 2027.