The Bank of Japan will run technical experiments using blockchain technology to settle deposits that financial institutions hold at the central bank, BOJ Governor Kazuo Ueda said. In a speech titled “The New Financial Ecosystem and the Role of Central Banks,” Ueda said a sandbox project is underway to test settlement using central bank money “in the form of current account deposits on a system that uses blockchains.”
The experiments will explore methods of connecting the blockchain system with existing infrastructure and examine use cases such as domestic interbank settlement and securities settlement. The project focuses on settlement using central bank current account deposits held by financial institutions at the BOJ. Ueda described the work as a controlled technical test supported by external experts, not a policy rollout.
The sandbox will study interoperability with current systems, including the Bank of Japan Financial Network System (BOJ-NET), and insights may be used to improve BOJ-NET. Ueda also suggested that integrating artificial intelligence and blockchain could enable enhanced financial services built on transaction and settlement data recorded on distributed systems. He cautioned that inadequate smart contract design could threaten the stability of financial markets and payment systems.
The project arrives as Japan refines its digital asset regulatory framework. In 2025, the Financial Services Agency held public consultations on reclassifying certain tokens under the Financial Instruments and Exchange Act, which could subject some digital assets to securities-style disclosure and market conduct rules. The government has framed blockchain and tokenization as part of its “New Capitalism 2025” growth strategy, positioning digital infrastructure as a pillar of financial modernization.
At the private sector level, Japan is expanding stablecoin integration. On Oct. 27, 2025, JPYC launched Japan’s first yen-backed stablecoin under the revised Payment Services Act, which recognizes stablecoins as electronic payment instruments. Sony Bank and stablecoin issuer JPYC signed a memorandum of understanding to study real-time transfers enabling customers to buy yen-backed stablecoins directly from bank accounts.
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