The Central Bank of Solomon Islands has launched a proof-of-concept for a central bank digital currency (CBDC) called Bokolo Cash, with Japanese blockchain Soramitsu providing support.
Bokolo Cash will be worth one Solomon Islands dollar. Project participants can use it in retail settings in the island nation’s capital, Honiara, and for person-to-person transfers.
Wholesale transfers between commercial banks and simulated cross-border payments and remittances will also be tested. Users will undergo “two-tier” Know Your Customer verification, according to Soramitsu.
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Bokolo Cash will operate locally on a tailor-made blockchain based on Hyperledger’s Iroha. It will have connectivity to Soramitsu’s public Sora blockchain as well, where users will be able to make transfers with QR codes and the self-custody Fearless Wallet, which was developed by Soramitsu.
The project was initiated on Nov. 1 but only announced on Nov. 29. Solomon Islands Prime Minister Manasseh Sogavare said:
“By embracing digital currency, we position our nation at the forefront of the global technological landscape. The CBDC Pilot Project signifies our commitment to embracing the future, capitalizing on the efficiency, transparency, and security that digital currency offers.”
The Solomons are a group of over 900 islands west of Papua New Guinea with a population of about 700,000. It joins other island nations — such as Palau, the Marshall Islands and Mauritius — in experimenting with CBDC. In addition, Tonga considered introducing Bitcoin (BTC) as legal tender but has yet to do so, while Vanuatu is the host nation of BTC-friendly Satoshi Island. The Eastern Caribbean countries already have an official CBDC called DCash.
Soramitsu is a major regional CBDC provider. Its technology powers the Cambodian bakong and Lao DLak, and it has launched a project to use the bakong and stablecoins in a regional cross-border payment system.
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