The Bank of Japan on March 3, 2026 announced a new experimental project to test settlement using central bank money - in the form of current account deposits - on blockchain-based infrastructure. The initiative marks a significant step in exploring how distributed ledger technology could complement or eventually reshape Japan's interbank settlement landscape.
What the Sandbox Tests
Governor Kazuo Ueda stated that the BOJ will "conduct technical experimentation on settlement using central bank money in the form of current account deposits on a system that uses blockchains." The sandbox will explore:
Methods of connection with the BOJ's existing settlement systems, including BOJ-NET Domestic interbank settlement use cases on distributed ledger infrastructure Securities settlement workflows using tokenized central bank money
Analysts note that blockchain-based reserves settlement could enable instant, round-the-clock settlement and reduce gridlock risk during stress events - addressing limitations of batch and scheduled settlement windows.
Project Agora: International Coordination
Japan is also participating in Project Agora, a multi-central-bank experiment exploring mechanisms for issuing tokenized central bank money on blockchain networks. The project involves multiple central banks and major financial institutions, and aims to improve cross-border payment efficiency by enabling interoperable tokenized settlement across jurisdictions.
Retail CBDC Decision Looms
Separately, the BOJ is expected to decide in 2026 whether to issue a retail digital yen (CBDC). Governor Ueda confirmed that pilot efforts continue, with technical experiments ongoing "which will make it possible to provide a digital form of cash when in demand." Japan began CBDC experiments in 2021 and launched a pilot in 2023, but has not yet committed to issuance.
What This Means for Payments Professionals
The sandbox signals that the BOJ is seriously evaluating blockchain as settlement infrastructure - not just for retail CBDC, but for the wholesale interbank layer. If successful, this could influence how BOJ-NET evolves and set a template for other central banks exploring DLT-based settlement. The distinction between retail CBDC and wholesale DLT settlement is important: even if Japan decides against a retail digital yen, blockchain-based interbank settlement could proceed independently.
Sources
CoinDesk - accessed 2026-03-10; Central Banking - accessed 2026-03-10; Payment Expert - accessed 2026-03-10.