| What to Know: – BOJ testing blockchain DLT for bank reserve settlement interoperability and automation. – Work studies deposit-reserve ledger interoperability and smart contracts automating payment operations. – Experiments prioritize cash-like settlement finality and legal certainty for CBDC-linked systems. |
According to the Bank of Japan, the central bank is testing blockchain-based distributed ledger technology (DLT) for bank reserve settlement. The work examines how commercial bank deposit ledgers could interoperate with the reserve ledger, and studies smart contracts to automate payment operations. Officials frame the activity as experiments, not a production launch.
Deputy Governor Shinichi Uchida has said the institution is verifying the technical feasibility of a digital yen and evaluating how to preserve settlement finality comparable to cash. In his 2025 remarks, he noted that instruments tied to central bank liabilities, including a CBDC, would need to deliver legal certainty that once settled, payments cannot be undone. That requirement shapes the approach to any DLT-based reserve linkage.
The trial focuses on connecting commercial bank deposit ledgers with the central bank reserve ledger on a permissioned DLT platform. Finality, operational resilience, and legal clarity are treated as binding design constraints to mirror today’s high-value settlement environment.
Industry discussions in central bank forums help explain why permissioned or hybrid designs are favored for core settlement. As reported by Brave New Coin, KPMG AZSA’s Kenji Hoki said, “public-type DLTs pose challenges for ‘real-time’ settlement,” citing consensus uncertainty and cost as practical limits.
Takeda, Director‑General for the Payment and Settlement Systems Department, described participation in Project Agorá, a multi‑central bank experiment that couples commercial and central bank deposits on a common DLT to enable near‑24/7 cross‑border payments. His remarks indicate the blueprint contemplates linking money claims to reserves on one platform while preserving jurisdictional controls.
Hiromi Yamaoka, then a senior department head, has argued that applying DLT to core payment rails will likely require revisiting legal and institutional frameworks that assume centralized ledgers. That includes clarifying settlement finality in code-governed environments and standardizing cross‑border rules where multiple jurisdictions interact.
That emphasis on finality also frames the ongoing evaluation of a central bank digital currency (CBDC). Even without a decision to issue, a wholesale‑grade instrument directly backed by central bank liabilities would natively anchor finality for any DLT‑linked reserve system.
At the time of this writing, Ripple (XRP) is priced at 1.35, while metrics indicate high volatility of 5.47% and an RSI of 43.67 categorized as neutral. Sentiment screens as bearish, and 12 of the past 30 days were green. These figures are contextual and separate from the policy experiments described above.
Disclaimer:
Marketbit.io provides cryptocurrency news, alerts, commentary, and entertainment content for informational purposes only. Nothing published on this site constitutes financial, investment, legal, or trading advice. Cryptocurrency markets are highly volatile and involve substantial risk, including the potential loss of capital. Always conduct your own research (DYOR) and consult with a qualified financial professional before making any investment decisions.
