Bank of Japan Governor Ueda Kazuo said the rapid integration of blockchain and artificial intelligence is reshaping the financial system, making central banks play a crucial role in entrenching trust as crypto-linked infrastructure matures.
Summary
- The BoJ is investigating the issuance or linking of central bank money to blockchain networks, including through Project Agorá and domestic sandbox tests.
- Japan’s CBDC retail program remains active, with technical experiments aimed at preparing digital cash as a future ‘anchor of trust’.
- Ueda warned that fragmented blockchain systems could create systemic risks unless central bank money bridges networks and guarantees the finality of settlement.
The Bank of Japan’s Ueda supports blockchain settlements and promotes CBDC experiments
Speaking at FIN/SUM 2026 in Tokyo, Ueda described blockchain as being firmly in its “implementation phase,” with decentralized finance (DeFi), smart contracts and tokenized assets increasingly impacting settlement, payments and cross-border finance.
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He emphasized that the programmability of blockchain, especially atomic transactions that bundle multiple actions into a single execution, could streamline complex processes such as delivery-versus-payment (DvP) and cross-border transfers.
For crypto markets, the speech highlighted two key themes: interoperability and settlement in central bank money.
Ueda warned that a fragmented ecosystem of multiple blockchains and traditional payment rails could create conversion bottlenecks and systemic risks if interoperability is not ensured. He suggested that central bank money, possibly in token form, could function as a bridge between networks, preserving the “singleness of money” while enabling innovation.
The BOJ is promoting several initiatives with direct implications for digital assets. The Central Bank Digital Currency (CBDC) pilot continues technical testing, while Project Agorá – a joint effort with other central banks and major financial institutions – explores tokenized central bank deposits on blockchain networks for cross-border payments.
A separate BOJ sandbox tests how deposits in current accounts at the central bank can be used to settle transactions executed on distributed ledgers.
Ueda also highlighted the growing role of AI in analyzing blockchain transaction data for risk management and AML/CFT compliance, signaling closer scrutiny of crypto-linked activities even as innovation expands.
The message to the markets was clear: blockchain-based finance is no longer experimental. But long-term stability, Ueda said, will depend on whether central banks will embed trust, liquidity and settlement finality into the next generation of digital infrastructure.
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