Central Bank of Solomon Islands (CBSI) Partners with Soramitsu for Innovative CBDC Proof-of-Concept
In a monumental stride towards revolutionizing financial infrastructure, the Central Bank of Solomon Islands (CBSI) has embarked on a transformative Proof-of-Concept (PoC) in collaboration with Soramitsu, heralding the advent of a Central Bank Digital Currency (CBDC) named Bokolo Cash.
The Bokolo Cash CBDC system, grounded on the Hyperledger Iroha 2-based permissioned blockchain network, marks a watershed moment for the Solomon Islands’ financial ecosystem. It’s a digital representation of the Solomon Dollar, uniting innovation with tradition by taking inspiration from the Bokolo, a shell-based currency once used in the region for distinct purposes.
Since its inception on November 1, 2023, the PoC has witnessed rigorous testing of Bokolo Cash for domestic and international payment scenarios, including simulated international remittances. Each Bokolo token mirrors the value of $1 Solomon Islands dollar, constituting legal tender within the precincts of the PoC.
The CBDC’s functionality extends to individual participants and businesses, enabling seamless transactions within the network and fostering acceptance at selected merchants in Honiara, Solomon Islands. Furthermore, the Bokolo Cash system facilitates interbank payments, both between CBSI and commercial banks and among commercial banks, establishing a foundation for wholesale CBDC usage.
Participants engaging with Bokolo Cash undergo a stringent two-tier Know Your Customer (KYC) verification process, ensuring compliance with international regulations and bolstering the system’s security and integrity.
A pivotal ceremony commemorating the CBDC’s demonstration experiment convened on November 28, 2023, featuring distinguished figures including Prime Minister Manasseh Sogavare, Finance Minister Harry Kuma, Central Bank Governor Luke Forau, and Ambassador Extraordinary and Plenipotentiary of Japan to the Solomon Islands, Miwa Yoshiaki, among others.
Prime Minister Sogavare underscored the profound impact of the CBDC, envisioning enhanced safety, credibility, financial inclusivity, and sustainable economic development for the Solomon Islands. This sentiment resonated with the attendees, including representatives from central banks across the Pacific region.
The innovation doesn’t stop there. Bokolo Cash users can bridge their CBDC tokens to the SORA network, a decentralized Substrate-based public blockchain network, allowing for inter-network transfers via QR codes using the Fearless Wallet mobile app. This integration leverages the security, availability, and speed of public blockchain infrastructure, paving the way for simulated cross-border transactions.
The CBSI’s collaboration with Soramitsu and the adoption of cutting-edge blockchain technology reaffirm its commitment to modernizing the financial landscape of the Solomon Islands. This initiative not only fosters financial inclusion but also sets the stage for potential collaboration among other central banks, amplifying the scope of CBDCs and facilitating cross-border remittances across jurisdictions.
As the Bokolo Cash PoC continues, it promises to furnish invaluable insights that will inform the CBSI’s decisions, enabling them to harness technology for the greater good of the Solomon Islands. The establishment of a regulatory sandbox and amendments to pertinent sections of the CBSI Act 2012 manifest the commitment to embrace digital currency advancements, steering the nation towards a dynamic financial future.
The CBSI’s resolute embrace of innovative solutions exemplifies its unwavering dedication to empowering its populace and fostering connectivity within the global economic framework. With this momentous leap into the digital realm, the Solomon Islands stands poised on the brink of a new era in finance, fortified by technological prowess and unwavering determination.
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