BOJ Tests Blockchain for Bank Reserve Settlement

The Bank of Japan will run technical experiments using blockchain to settle deposits that financial institutions hold at the central bank, Governor Kazuo Ueda said in a speech titled “The New Financial Ecosystem and the Role of Central Banks.” A sandbox project will test settlement using central bank money "in the form of current account deposits on a system that uses blockchains." The trials will explore methods of connection with the existing system and examine use cases such as domestic interbank settlement and securities settlement.

The project focuses on current account deposits held by financial institutions at the BOJ and will proceed with support from external experts as a controlled technical test rather than a policy rollout. The sandbox will study interoperability with systems including the Bank of Japan Financial Network System, known as BOJ-NET, and findings may be used to improve BOJ-NET.

Japan

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