The Bank of Japan is testing out the use of central bank money for a wide range of settlements on blockchains.
The sandbox project will involve technical experimentation on settlement using central bank money in the form of current account deposits on a system that uses blockchains.
In a speech at the FIN/SUM 2026 conference, Governor of the Bank of Japan Kazuo Ueda said the project would also involve gaining the support of external experts, exploring methods of connection with the existing system and examining use cases such as domestic interbank settlement and securities settlement.
The results of the experimentation will also inform any improvements made to the Bank of Japan Financial Network System (BOJ-NET), a payments infrastructure operated by the Bank.
Throughout the speech, Ueda emphasised the growing momentum of the fintech industry in Japan and the responsibility the Bank of Japan has in supporting these developments and acting as an “anchor of trust”.
“Going forward, the Bank will continue to enhance its central banking operations while deepening insights into new technologies such as AI and blockchain, properly fulfilling its role as the anchor of trust in a new financial ecosystem,” he said.
The speech also highlighted existing efforts by the Bank to support digital innovation. Ueda noted the Bank’s participation in Project Agora, analysing central banks’ capabilities to issue central bank money as tokenised deposits on the blockchain.
The Bank’s FinTech Center has also conducted joint research with the European Central Bank (ECB) to identify opportunities and possible challenges that blockchain technology could bring to financial market infrastructures.
Additionally, the Bank’s Institute for Monetary and Economic Studies (IMES) has held workshops to explore legal considerations surrounding issues including the use of distributed ledger technology (DLT) in securities settlements and the use of algorithms and AI.
Towards the end of 2025, several Japanese banks made strides in stablecoin issuance. JPYC Inc. launched Japan’s first regulated yen-backed stablecoin under the revised Payment Services Act and MUFG, SMBC Group and Mizuho joined forces to issue a yen-pegged stablecoin in the same month.
