BOJ Maps a Dual-Track Payments Future: Wholesale CBDC, Tokenized Deposits, and a New Real-Time Rail

The Bank of Japan is assembling the components of a next-generation payment architecture that ties together a wholesale central bank digital currency, a possible new real-time retail payment system, and a sandbox for testing distributed ledger technology in a live institutional setting. In opening remarks to the central bank’s Liaison and Coordination Committee on CBDC, Executive Director Kamiyama Kazushige laid out a series of domestic and international developments that, taken together, suggest Japan is moving from technical study toward structured testing.

The wholesale CBDC, which Kamiyama described as “tokenized current account deposits at the Bank,” is the headline item. Designed for large-value settlement between financial institutions, it would run on DLT and is intended to support not only interbank payments but also simultaneous delivery-versus-payment settlement of different digital assets. The BOJ plans to advance discussions on a “DLT Sandbox Project” within its existing CBDC Forum to examine practicality and technical obstacles before making any decision on deployment. Kamiyama said the insights would also be used to enhance the existing BOJ-NET system and make the domestic funds settlement infrastructure more robust.

The wholesale initiative does not sit in isolation. In March, the Japanese Banks’ Payment Clearing Network, Zengin-Net, published a report proposing the construction of a new real-time payment system separate from the legacy Zengin Data Telecommunication System. The proposal envisions the new system accommodating tokenized deposits and integrating with the BOJ’s tokenized current account deposits — in effect, connecting the wholesale central bank layer with a modernised commercial bank settlement rail. Kamiyama said the domestic settlement infrastructure is “expected to evolve further toward meeting the payment needs of the next generation.”

On the retail side, the BOJ continues pilot experiments that simulate the initial stages of real-world implementation. The work this fiscal year is focused on identifying challenges in the stable operation of ledger technology and finding solutions for smooth transaction processing and security risk minimisation. Kamiyama signalled that the bank intends to prepare for “future societal implementation” while deepening collaboration with relevant organisations, though no timeline for a decision on issuance was offered.

Offshore Context: Europe Builds, America Buys

Kamiyama placed Japan’s work in the context of divergent strategies abroad. The European Central Bank in March published “The Eurosystem’s comprehensive payments strategy,” outlining a settlement architecture that spans wholesale, business-to-business, cross-border and retail payments — including the digital euro. The ECB’s Pontes and Appia projects are developing central bank money for DLT-based settlement, an approach Kamiyama described as sharing the same objective as the BOJ’s wholesale CBDC exploration: efficient DvP settlement of digital assets using central bank money.

In the United States, he noted, the financial system is evolving with a focus on stablecoin utilisation while maintaining a cautious stance toward a retail CBDC. Tokenization is being promoted across asset classes — not only funds but also stocks, bonds and alternative assets — and its expansion is accelerating.

Cross-Border: Agorá Moves to Real-Value Testing

The cross-border dimension is being addressed through Project Agorá, in which the BOJ participates alongside six other central banks and more than 40 private financial institutions. The project, which explores interbank settlement using tokenized bank deposits and central bank money, has completed prototype development and initial testing. A report compiling findings was released this week. Kamiyama said the next phase would involve real-value testing using the prototype and deeper discussion of governance and operational resilience.

The Common Thread: Programmability

Kamiyama identified “programmability” — the automation of the circulation and management of funds and securities through computer programs — as a theme underpinning all these efforts. Its significance, he said, is being amplified by the emergence of AI agents, and Japan must “actively address this change.” The Financial Services Agency has launched a Payment Innovation Project to accelerate technology development, and the BOJ intends to use its sandbox framework to engage stakeholders in refining new payment technologies before they reach production.

Kamiyama closed by arguing that developed economies with established payment infrastructure should not pursue a leapfrog strategy of the kind seen in some emerging markets. Instead, he said, the right approach is to improve existing infrastructure while building new systems in parallel, guided by a shared vision of where economic and technological evolution is heading. “The time has finally come to move beyond the plateau and start climbing the stairs,” he said. The BOJ’s sandbox, the wholesale CBDC work, and the Zengin-Net proposal are the first steps on that staircase.