BOJ Adds Wholesale Digital Currency to CBDC Research

Bank of Japan Expands CBDC Research into 24/7 Wholesale Digital Currency and Tokenization

  • The Bank of Japan is expanding its CBDC research to include a wholesale digital currency and tokenization.
  • This new project aims to enable 24/7 interbank settlement and programmable payments, moving beyond the current five-day system.
  • The initiative appears to be inspired by similar wholesale DLT settlement work being conducted in Europe.

In early February, Bank of Japan director Kazushige Kamiyama announced an expansion of the central bank’s long-running CBDC research to include a wholesale digital currency and tokenization. This move builds on years of retail CBDC exploration involving 64 companies, despite previous statements questioning the need for a launch.

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The goal, as detailed by the Nikkei, is to tokenize part of the deposits held at the central bank. Consequently, this would allow for settlement between banks to operate 24/7 instead of just five days a week during business hours.

Furthermore, the tokenized system would support programmable payments. However, few other specific details about the project have been publicly released at this time.

The bank’s latest wholesale CBDC project seems to draw inspiration from Europe’s ongoing distributed ledger technology settlement work. Meanwhile, the research continues under the established CBDC Forum with its multiple working groups.

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