BOJ Tests Blockchain for Bank Reserve Establishment
BOJ Governor Kazuo Ueda said the Bank of Japan will conduct technical trials using blockchain technology to secure deposits held by financial institutions at the central bank.
In a speech posted on Tuesday titled “The New Financial Ecosystem and the Role of Central Banks,” Ueda said a sandbox project is underway to test a solution using central bank money “with account deposits on a system that uses blockchain.”
The trials will explore “methods of interaction with the existing system” and explore use cases, including “domestic interbank settlement and collateral handling”.
The project focuses on the settlement of central bank current account deposits held by financial institutions at the BOJ. Yuda said the BOJ plans to frame its work as a controlled technical experiment rather than a policy release, with support from outside experts.
Sandblasting targets interaction and settlement pattern
The sandbox will study interworking with existing systems, including the Bank of Japan's Financial Network System, known as BOJ-NET. Yuda said insights from the project could be used to improve BOJ-NET.
Yuda added that by integrating artificial intelligence and blockchain, improved financial services are built on transaction and settlement data recorded on distributed systems.
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Yuda warns of design risks associated with modern contracts. “If the design of smart contracts is not sufficient, the stability of financial markets and payment systems may be at risk,” he said.
Japan's comprehensive digital asset framework
The sandbox comes as Japan refines its digital asset regulatory framework.
In the year In 2025, the Financial Services Agency conducted a public consultation on the reclassification of certain tokens under the Financial Instruments and Exchange Act.
The government has developed blockchain and tokenization as part of its broader “New Capitalism 2025” development strategy, positioning digital infrastructure as a pillar of financial reform.
Japan is also expanding the integration of stall coins at the private sector level. In the year On October 27, 2025, the JPYC launched Japan's first yen-backed stablecoin under the country's revised Payment Services Act, which recognizes stablecoins as electronic payment instruments.
On Monday, Sony Bank and stablecoin issuer JPYC signed a memorandum of understanding to explore real-time transfers that would allow customers to buy yen-backed stablecoins directly from bank accounts.
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