You can use SHA-256 in production. And you can convert SHA-1 repos into SHA-256 repos.
However:
- SHA-1 repos are not compatible with SHA-256 repos so you can't mix and match the trees (i.e. a SHA-256 fork couldn't upstream their commits to a SHA-1 repo).
- The conversion path from SHA-1 to SHA-256 will break all GPG signatures on the repo.
- There may be breaking changes to the SHA-256 repository implementation in the future however those changes will be guaranteed to come with an upgrade path for any users of the existing SHA-256 implementation.
So it's viable as an option but it's by no means "blessed" like the existing SHA-1 impl is.