Bank of Japan Launches Blockchain Settlement Sandbox, XRP Ledger be Chosen?

The Bank of Japan (BOJ) has initiated a blockchain settlement sandbox program to explore the feasibility of moving central bank reserve money on a blockchain. This initiative aims to leverage instant transfers and smart contracts to modernize financial transfers within the country. The sandbox will test atomic transactions, smart contract functionality, AI integration, and compatibility with BOJ-NET, Japan’s existing interbank settlement system. While no specific blockchain has been selected, the program has drawn attention to Japan’s established relationship with Ripple and the XRP Ledger (XRPL).

SBI Holdings, a major Japanese financial group and Ripple shareholder since 2016, has already been utilizing the XRPL for cross-border payments. Recently, SBI launched a digital bond with XRP-linked incentives and agreed to distribute Ripple’s RLUSD stablecoin in Japan. These developments have led to speculation that the XRPL could be a strong contender if the BOJ decides to adopt a blockchain system for settlement.

Although the BOJ is also researching a digital yen through its CBDC experiments, this sandbox program appears focused on improving infrastructure efficiency. Ripple CEO Brad Garlinghouse has commended Japanese policymakers for their support of blockchain technology and clear regulatory frameworks, further suggesting a favorable environment for blockchain innovation in Japan.

(Source：Coinpedia)