The Bank of Japan held the 11th meeting of its Liaison and Coordination Committee on CBDC on May 29, 2026, with Executive Director Kamiyama Kazushige delivering opening remarks under the theme "Stepping into the Future: Shaping the Evolution of Japan's Payment and Settlement Systems." The session comes as Japan faces its most consequential deadline yet in a five-year research process: a formal decision on whether to issue a retail digital yen is expected in 2026. Coverage of this meeting draws on BOJ documents and contemporaneous accounts, as the full text of Kamiyama's May 29 address was not available in machine-readable form at the time of publication.

From Research Phase to Decision Point

Japan's CBDC program began in April 2021 with basic ledger design tests, progressed through reliability testing in 2022, and entered a live pilot phase in April 2023 involving approximately 60 private-sector institutions. The BOJ has been careful at each stage to frame progress as exploratory rather than committed. That posture has not changed, but the program's organizational structure has. In February 2026, at the 10th committee meeting, Kamiyama announced the dissolution of seven original working groups and their replacement with three consolidated Discussion Groups covering CBDC architecture, new technologies (including stablecoins and distributed ledger technology), and ecosystem infrastructure. At that February 2026 meeting, Kamiyama described the shift using a spatial metaphor: isolated research "points" forming "lines," which then expand into broader "surfaces" representing national payment policy.

"Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient," Kamiyama said in remarks reported at the time.

Technical Progress, With Caveats

The BOJ has cleared one major threshold: no critical technical barriers to implementation have been identified. "At this stage, no critical technical issues preventing the social implementation of CBDC have been identified," the minutes from the February 2026 meeting stated. However, scaling remains unresolved. Stress testing has reached 50,000 transactions per second, half the 100,000 TPS estimated necessary for a full national rollout. Transaction latency under high load currently sits at around three seconds, a figure that would matter significantly for retail use cases at point of sale.

Commercial banks represented through the Japanese Bankers Association have welcomed the program's broadened scope but flagged a central concern: without sustainable economics for intermediaries, private institutions have little incentive to invest in the required infrastructure. The association has also pressed for holding limits on any digital yen to prevent large-scale deposit flight from commercial banks into central bank accounts.

Stablecoins Running Parallel

While the CBDC decision is still pending, Japan's regulated stablecoin market is already operational. JPYC Co. launched the world's first fully regulated yen-pegged stablecoin in October 2025.

SBI Holdings has plans for its own yen stablecoin in the second quarter of 2026, as of the date of this writing.

A consortium of Japan's three largest banks, MUFG, SMBC, and Mizuho, is pursuing Project Pax, which targets one trillion yen (roughly $6.5 billion) in business-to-business stablecoin volume by 2028. The total JPY stablecoin market capitalization stood at approximately $36.6 million in early 2026, small in absolute terms but growing in institutional segments.

Japan's Payment Services Act amendments governing foreign stablecoins entered full enforcement by June 13, 2026, following a phased window that began June 1. This milestone arrived just two days after the BOJ published findings from the 11th committee meeting on June 11.

Cross-Border Relevance: South Asia and Beyond

The BOJ's work carries direct implications for migrant workers and their families across South Asia. Japan hosts significant populations of workers from Bangladesh, Nepal, India, and Sri Lanka, all of whom rely on international remittance corridors that currently carry correspondent banking fees averaging 5 to 7 percent. India received $129 billion in remittances in 2025; Bangladesh exceeded $30 billion in fiscal year 2025; Nepal's remittances account for more than 28 percent of GDP.

Regional infrastructure is advancing in parallel. Bangladesh has already launched a blockchain-enabled remittance corridor that reduced transfer costs by approximately 30 percent in pilots. Nepal Rastra Bank is targeting a phased CBDC pilot by 2026. These developments indicate that South Asian counterparts are building integration-ready infrastructure of the kind a digital yen corridor would require.

Japan is a participant in Project Agorá, a BIS-led wholesale settlement platform involving seven central banks and more than 40 financial institutions. The BIS published the Project Agorá framework on May 27, 2026, just two days before the 11th CBDC Committee meeting, a proximity that suggests the initiative informed the session's agenda. The platform's modular architecture is designed to support bilateral linkages. Analysts have pointed to a potential digital yen to digital rupee corridor as a candidate for early development, given India's own digital rupee pilot, which has reached 7 million users, though no such corridor has been formally proposed by the BOJ or BIS.

Japanese firm Soramitsu is separately developing a cross-border payment platform using CBDCs and stablecoins targeting Japan, India, and Southeast Asia. The BOJ's new API sandbox, housed under the Discussion Group on CBDC Ecosystem, is intended to support integration testing ahead of any launch decision, offering a potential entry point for South Asian fintech developers.

Africa: Lessons and Gaps

For African central banks, Japan's journey offers a different kind of value: a case study in what deliberate co-design with the private sector looks like. Nigeria's eNaira, by contrast, launched with ambition but saw roughly 98.5 percent of created wallets go unused, a failure tied to inadequate merchant infrastructure and limited offline capability. The BOJ has prioritized offline payment support and biometric accessibility for aging populations since early design phases.

Africa's own CBDC landscape is broad and evolving. Approximately 25 African countries are currently exploring central bank digital currencies, spanning retail and wholesale models. South Africa's Project Khokha has advanced wholesale CBDC infrastructure, while Morocco and Egypt have been experimenting with cross-border payment corridors. Project Agorá does not currently include any African central bank, though its modular architecture leaves room for future expansion. Japan's iterative, co-designed approach may offer a useful reference as African policymakers weigh their own issuance timelines.

What Comes Next

The BOJ has not signaled a specific timeline for its 2026 decision, and Kamiyama's remarks were framed as progress notes rather than announcements. The committee typically meets multiple times per year, and further sessions are expected before any final determination is made.

If Japan opts against a retail CBDC and leans further into regulated stablecoins, it would mark a significant signal for other G7 economies still weighing the same question. The EU is targeting a digital euro by 2029, with a pilot phase scheduled to begin in mid-2027; China has already pivoted its digital yuan program toward a bank-issued model. The United States has banned retail CBDC outright via executive order. Japan's eventual call, whenever it comes, will land in a global landscape that has already begun sorting itself into camps.