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BOJ explores tokenized central bank money as 2026 digital yen decision looms

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BOJ explores tokenized central bank money as 2026 digital yen decision looms

The Bank of Japan (BOJ) announced expansion of its blockchain experimentation for settling central bank reserves, while highlighting that efforts for a retail central bank digital currency (CBDC) are ongoing.

The BOJ rolled out a “sandbox project” to experiment settlements and bank deposits using central bank money, Governor Kazuo Ueda said on Tuesday in a speech titled The New Financial Ecosystem and the Role of Central Banks.”

“In this experimental project, the Bank will conduct technical experimentation on settlement using central bank money in the form of current account deposits on a system that uses blockchains,” Ueda said.

The bank intends to explore “methods of connection with the existing system as well as examining use cases such as domestic interbank settlement and securities settlement,” he added. Analysts say introducing blockchain for reserves settlement would allow for instant round-the-clock settlement and reduce gridlock risk in stress events.

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Ueda emphasized that the retail CBDC project is ongoing. “First, the ongoing pilot program for retail central bank digital currency (CBDC) involves the bank’s continued conduct of technical experiments, which will make it possible to provide … a digital form of cash when in demand by the wider public.”

Japan began CBDC experiments in 2021 and launched a pilot program in 2023. But the central bank has not committed to issuing a digital yen. According to a prior report, the BOJ this year will decide whether to issue a retail CBDC.

Ueda also spoke of Project Agorá,” an international experiment involving multiple central banks and major private financial institutions. He said its participants are considering “building a mechanism that would enable central banks, including the Bank of Japan, to issue central bank money as tokenized deposits on the blockchain.” If successful, he said, the effort “may bring innovation in terms of streamlining cross-border payments.”

Unlike a retail CBDC, which would function as a digital form of yen for the general public, tokenized central bank deposits would represent wholesale central bank money used by financial institutions on blockchain-based infrastructure, according to Ueda’s speech.

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The move to use blockchain technology to settle reserves follows decisions in the U.K. and Hong Kong to issue sovereign debt on the blockchain.

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Crypto World

Bitcoin Profitability Near 50% Mirrors Previous Market Bottoms

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Cryptocurrencies, Bitcoin Price, Bitcoin Analysis, Adoption, Cryptocurrency Exchange, Price Analysis, Market Analysis, Bitcoin ETF, ETF

The total Bitcoin (BTC) supply in profit stands at 60.6% on Thursday, continuing to move within a range historically associated with market cycle resets. The metric previously dropped to 50.8% on Feb. 5, its lowest level since January 2, 2023, leaving a large share of holders at breakeven or at a loss.

Similar conditions in the past cycles have preceded strong upside moves. In January 2023, BTC traded at $16,682 when profitability levels were comparable at 51%, before rallying 655% to $126,000 in 2025.

A similar setup occurred in March 2020, when the total supply in profit fell below 50% as BTC traded at $6,500, ahead of a move to $69,000 in 2021.

Bitcoin profitability returns to prior market cycle base levels

Over the past five years, the 50–60% profitability range has repeatedly marked periods where a large portion of holders sat near the BTC cost basis. That compresses unrealized gains across the network and reduces the incentive to sell into weakness.

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Cryptocurrencies, Bitcoin Price, Bitcoin Analysis, Adoption, Cryptocurrency Exchange, Price Analysis, Market Analysis, Bitcoin ETF, ETF
Bitcoin Supply in Profit (%). Source: CryptoQuant

It is important to note that the metric does not pinpoint a price bottom. It outlines a zone where long-term accumulation has led to high returns while the downside sell pressure has eased.

In past cycles, Bitcoin price bottoms were formed when the long-term holder net unrealized profit/loss (LTH-NUPL) turned negative, as seen during the 2015, 2018, and 2022 bear markets. This phase marked a period where the long-term investors were holding at a loss.

However, the current LTH-NUPL reading is near 0.40, which means that the long-term holders are still comfortably in profit, even as the overall supply profitability has dropped near market cycle lows.

Cryptocurrencies, Bitcoin Price, Bitcoin Analysis, Adoption, Cryptocurrency Exchange, Price Analysis, Market Analysis, Bitcoin ETF, ETF
Bitcoin LTH-NUPL data. Source: CryptoQuant

This gap highlights a shift in the market environment. A growing share of Bitcoin supply is now held by corporate entities and spot exchange-traded funds (ETFs), which collectively control close to 15.8% of the circulating supply, i.e., 3,319,677 BTC.

These participants typically operate with a longer holding period and lower sensitivity to short-term price swings.

As a result, the profitability compression across the BTC market does not translate into the same level of forced selling from long-term holders seen in previous cycles in 2015, 2018, and 2022.

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This change helps explain why the total supply in profit may revisit historical accumulation zones while the long-term holder profitability stays elevated.

Related: Bitcoin in ‘later stages’ of bear market: Watch these BTC price levels

BTC exchange flows align with valuation models

The short-term holder BTC flows to Binance fell to 25,000 BTC on March 25. Crypto analyst Darkfost said it is a new market low, down from roughly 100,000 BTC during the early February sell-off. This decline shows a clear reduction in reactive selling from the newer market participants.

Cryptocurrencies, Bitcoin Price, Bitcoin Analysis, Adoption, Cryptocurrency Exchange, Price Analysis, Market Analysis, Bitcoin ETF, ETF
Bitcoin STH inflows on Binance. Source: CryptoQuant

Meanwhile, crypto analyst GugaOnChain noted that the valuation models can help identify where the deeper market stress may emerge for BTC. Metrics such as market-value to realized-value (MVRV) below 1, NUPL under -0.2, and a Puell Multiple near 0.35 have historically appeared during periods of heavy retail pressure and undervalued conditions.

While these indicators do not predict the exact market bottoms, they highlight zones where downside risk has historically been limited relative to long-term upside, offering a clearer view of overall market positioning.

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Related: Bitcoin dips 3% as analysis says $70K BTC price ‘not obviously bearish’