Bank of Japan Expands CBDC Research to Tokenized Deposits and Wholesale Settlement

The Bank of Japan has maintained an extensive retail central bank digital currency (CBDC) research programme for several years, involving multiple working groups and a broad range of private sector participants. Despite earlier indications that a retail launch was not imminent, the initiative continues to evolve. In early 2026, central bank officials confirmed that the scope of the project would be expanded to include wholesale CBDC applications and tokenization, reflecting a shift toward more advanced digital financial infrastructure.

Recent developments indicate that the focus of the project includes the tokenization of central bank deposits, which could enable near real-time settlement between financial institutions on a 24/7 basis, as opposed to traditional settlement windows limited to business hours. In addition, tokenized central bank balances may support programmable payments and more efficient transaction processing. Rather than formally adopting the terminology of wholesale CBDC, the central bank has described this approach as transferring current account balances on distributed ledger infrastructure, with a particular emphasis on interoperability between different payment systems.

This initiative is closely aligned with broader international developments, including Project Agorá, a cross-border payments project involving multiple central banks and global financial institutions. The objective is to reduce settlement delays in correspondent banking by enabling simultaneous and atomic transaction processing through tokenized mechanisms, while also addressing compliance bottlenecks such as KYC data sharing. At the same time, the Bank of Japan is restructuring its CBDC Forum to focus on core areas including system architecture, emerging technologies such as blockchain and tokenized deposits, and integration with existing financial systems, underscoring the increasing legal and regulatory relevance of these developments.