Bank of Japan Governor Kazuo Ueda Confirms Blockchain Tests for Reserve Settlements

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The Bank of Japan is moving forward with experiments using blockchain technology for central bank settlements, marking a concrete step toward integrating the innovation into the nation’s core financial infrastructure.

In a speech delivered Tuesday at the FIN/SUM conference in Tokyo, Governor Kazuo Ueda detailed how central banks must adapt to what he characterized as a “new financial ecosystem.” He pointed to tokenization, programmability, and blockchain-based settlement as key forces that could reshape both payments and securities markets in the years ahead.

While emphasizing that the BOJ maintains a cautious posture, Ueda confirmed the institution will begin experimenting with its current account deposits—essentially the reserves that financial institutions hold at the central bank. He also announced the development of a dedicated sandbox project designed to test whether central bank money can operate effectively within blockchain-based systems.

According to Ueda, such experiments could ultimately pave the way for more efficient interbank transfers and securities settlement. He suggested the potential benefits would be amplified if combined with smart contracts that enable faster execution of transactions.