- Bank of Japan blockchain experiments test central bank deposit settlement on blockchain systems.
- Sanae Token surged to $27.7M before falling to about $7M after the denial.
- Japan’s FSA may probe token issuance under the Payment Services Act.
The Bank of Japan’s blockchain experiments have entered a new phase as the central bank begins technical testing on how distributed ledger systems could be used to settle deposits held by financial institutions at the central bank.
Bank of Japan Blockchain Experiments Target Interbank and Securities Settlement
Governor Kazuo Ueda on Tuesday confirmed that a sandbox project is underway to examine settlement using central bank money in the form of current account deposits on a blockchain-based system.
In a speech titled “The New Financial Ecosystem and the Role of Central Banks,” Ueda outlined how the Bank of Japan is evaluating whether blockchain infrastructure can support domestic interbank settlement and securities settlement. The project is structured as a technical experiment and will proceed with the involvement of external experts.
According to Ueda, the sandbox will test settlement using central bank current account deposits held by financial institutions at the Bank of Japan. These deposits represent central bank money and serve as the backbone of Japan’s interbank settlement framework.
Moreover, the central bank will explore methods to connect a blockchain-based system to its existing infrastructure. Among the use cases under review are domestic interbank settlement and securities settlement. The objective is to determine whether distributed systems can integrate with current operational processes while maintaining stability and efficiency.
The sandbox will also examine interoperability with the Bank of Japan Financial Network System, commonly known as BOJ-NET. BOJ-NET functions as the central bank’s core payment and settlement network. Ueda stated that the project’s findings may contribute to improvements in BOJ-NET’s architecture and performance.
Smart Contract Risk and AI Integration.
As part of the Bank of Japan’s blockchain experiments, the central bank is also re-evaluating the advantages and potential risks of distributed ledger systems. Ueda pointed out that artificial intelligence and blockchain technology can be combined to deliver sophisticated financial services based on transaction and settlement data captured across distributed systems.
At the same time, he cautioned about the design risks associated with smart contracts. He stated that inadequate smart contract design could threaten the stability of financial markets and payment systems. The warning underscores the importance of technical safeguards during experimentation.
Ueda’s remarks framed the initiative as part of a broader examination of how central banks may adapt to evolving financial ecosystems. However, the project remains limited to technical testing within a sandbox environment.
“Sanae Token” Surge Draws Regulatory Attention
Separately, a cryptocurrency referencing Japanese Prime Minister Sanae Takaichi briefly surged before declining sharply after she publicly denied any involvement. According to crypto data tracker Gmgn, the Solana-based token known as “Sanae Token” reached a market capitalization of approximately $27.7 million on February 25.
Following Takaichi’s statement on X denying any knowledge of or approval for the token, its price and market value fell significantly. At the time of writing, the token’s market capitalization stood at about $7 million.
In her statement, Takaichi said she had no knowledge of the token and that neither she nor her office had been informed about it. She added that the clarification was issued to prevent public misunderstanding arising from the use of her name.
Japan’s Financial Services Agency is reportedly considering whether to investigate parties involved in the token’s issuance. According to Kyodo News, the regulator is considering a probe to verify the facts surrounding the token’s creation and distribution. The FSA has not publicly announced a formal investigation.
The report reported that the company that issued the token might not be registered to issue crypto assets in Japan. Providers of crypto asset exchange services are required to be registered under the Payment Services Act. These may lead to regulatory interest if a company operates without being registered, especially when consumer protection issues arise.
Political-Themed Tokens Surface in Multiple Jurisdictions
Such tokens featuring prominent personalities have been encountered in recent speculative Fantasy cycles across several nations. In the United States, there was a trend in which tokens mentioning President Donald Trump were periodically popular, and then an official token was declared.
The token briefly rose to approximately $73 before declining sharply. At the time of writing, it trades around $3.40, roughly 95% below its peak. In Argentina, the Solana Libra token was the subject of controversy in February 2025, when President Javier Milei endorsed it on X soon after its release.
