Kamiyama outlines future of Japan's payment systems
Bank of Japan Executive Director Kamiyama Kazushige outlined the future evolution of Japan's payment and settlement systems, focusing on wholesale and retail central bank digital currency (CBDC) initiatives. He delivered these remarks at the 11th Meeting of the Liaison and Coordination Committee on CBDC on May 29, 2026.
Japan's DLT journey for wholesale CBDC
The Bank of Japan announced its plan in March to explore tokenized current account deposits, known as wholesale CBDC, as 'central bank money.'
This DLT-based digital currency is intended for large-value interbank settlements and efficient simultaneous settlements (DvP) of digital assets.
To assess its practicality and technical challenges, the Bank will advance discussions on a 'DLT Sandbox Project' within the CBDC Forum, aiming to enhance the Bank of Japan Financial Network System (BOJ-NET) and bolster Japan's domestic funds settlement system.
Complementing this, the Zengin-Net's March report, 'Study Group on the Future Vision of the Payment System,' proposed a new real-time payment system.
This system would flexibly accommodate new technologies like tokenized deposits and integrate with the Bank's tokenized current account deposits, evolving Japan's settlement infrastructure for future payment needs.
Global CBDC efforts and programmability
The Bank continues its retail CBDC studies and pilot experiments this fiscal year, focusing on stable ledger operation and security risks for future implementation.
Globally, CBDC approaches vary: the US prioritizes stablecoins and asset tokenization, while Europe actively explores both retail and wholesale CBDCs, with the ECB advancing DLT-based settlement projects.
Japan also participates in 'Project Agorá,' a multi-central bank and private institution collaboration exploring new interbank settlement systems using tokenized bank deposits and central bank money; initial findings were reported this week, and real-value testing is planned.
A major theme across these global efforts is 'programmability,' the automation of fund and security management via computer programs, which Japan must actively embrace with the rise of AI agents.
Evolution, not revolution
For developed economies, simultaneously improving existing payment infrastructure and building new systems is a pragmatic necessity.
While new technologies offer convenience and growth, a 'leapfrog' approach is inappropriate given robust existing infrastructure.
A shared vision among stakeholders is thus crucial to navigate this dual evolution, ensuring future payment system safety and efficiency.