Bank of Japan Governor Kazuo Ueda said the rapid integration of blockchain and artificial intelligence is reshaping the financial system, and as crypto-related infrastructure matures, central banks will play a pivotal role in embedding trust.
summary
- The Bank of Japan is considering issuing central bank currency and connecting it to blockchain networks through Project Agora and domestic sandbox tests.
- Japan’s retail CBDC program remains active, with technology experiments aimed at preparing digital cash as a future “anchor of trust.”
- Ueda warned that fragmented blockchain systems could pose systemic risks unless central bank money bridges the network and ensures finality of payments.
Bank of Japan Ueda supports blockchain payments, promotes CBDC experiment
Speaking at FIN/SUM 2026 in Tokyo, Ueda explained that blockchain is firmly moving into the “implementation phase”, with decentralized finance (DeFi), smart contracts and tokenized assets increasingly impacting payments, payments and cross-border finance.
You may also like: Is Fed rate cuts at risk as Janet Yellen warns of inflation from US-Iran war?
He highlighted that blockchain’s programmability, especially atomic transactions that combine multiple actions into a single execution, can streamline complex processes such as delivery versus payment (DvP) and cross-border remittances.
Regarding the cryptocurrency market, the talk highlighted two important themes: interoperability and central bank money payments.
Ueda warned that a fragmented ecosystem of multiple blockchains and traditional payment rails could create transformation bottlenecks and systemic risks if interoperability is not ensured. He suggested that central bank money, potentially in tokenized form, could act as a bridge between networks, allowing for innovation while preserving “the unity of money.”
The Bank of Japan is pursuing several initiatives that have a direct impact on digital assets. The company’s retail central bank digital currency (CBDC) pilot continues to test the technology, while Project Agora, a joint effort with other central banks and major financial institutions, is exploring tokenized central bank deposits on a blockchain network for cross-border payments.
A separate BOJ sandbox is testing how central bank current accounts can be used to settle transactions made on distributed ledgers.
Ueda also highlighted the growing role of AI in analyzing blockchain transaction data for risk management and AML/CFT compliance, and suggested that cryptocurrency-related activities will be more closely monitored even as innovation expands.
The message to the market was clear. Blockchain-based finance is no longer experimental. But Ueda said that long-term stability depends on central banks building trust, liquidity and payment finality into the next generation of digital infrastructure.
read more: Department of Justice seeks forfeiture of $327,000 in USDT related to romance scam
