Bokolo Cash, the new digital currency, is intended to drive technological advancement and economic growth. Several government officials of the country were also present in the ceremony, including the Prime Minister of the Solomon Islands. Representatives of the central banks of New Zealand, Australia, and a few other countries were in attendance. The Japanese company provides the technology for Cambodia’s bakong and Laos’ DLak CBDCs. It also started a project to facilitate cross-border payments between countries using the bakong and stablecoins. “CBDC will improve safety, credibility, and privacy, provide financial services that leave no one behind, and bring sustainable economic development and technological development to the Solomon Islands, enabling a new era,” said Sogavare.
A ceremony for the CBDC demonstration experiment took place on November 28, 2023; Soramitsu gave speeches to the participants and provided screened and practical CBDC demonstrations. Soramitsu also explained the results of the CBDC experiment, the benefits that arise from introducing the CBDC to the Pacific island countries, and its effects on individuals, the financial and industrial sector, the government, and others. The Solomon Islands, comprising over 900 islands to the west of Papua New Guinea with a population of approximately 700,000, is now part of a growing trend among island nations exploring CBDC.
Within the scope of the PoC, Fearless Wallet is used to simulate cross-border transactions. Testing participants will be able to use it for retail transactions in Honiara, the island nation’s capital, and for personal transfers. The project will also test wholesale transfers between commercial banks, simulated cross-border payments, and remittances. Furthermore, by embracing digital currency, we position our nation at the forefront of the global technological landscape.
The success of this initiative relies on collaboration, feedback, and a collective commitment to ensuring that the benefits of digital currency are shared equitably among our people. Ladies and gentlemen, this initiative is in line with my Government‘s policy as reflected in the National Development Strategy. The initiative would be a critical step towards reducing financial exclusion, as it will empower those who underserved and unbanked or excluded from the formal financial system. The CBDC will provide a secure and accessible means of conducting financial transactions, ensuring that no one is left behind in our journey towards progress. The Bokolo Cash PoC will provide valuable insights for the CBSI, aiding in decision-making as they leverage the latest technology for the betterment of the Solomon Islands. The implementation of a regulatory sandbox and amendments to the CBSI Act 2012 for digital currency developments are steps towards this modernization.
The move by the Solomon Islands is not particularly unusual for small island development states (SIDS). The Marshall Islands, Palau, Eastern Caribbean nations and many others are also looking into the technology to solve the logistical and financial infrastructure problems inherent in their geography. Soramitsu is an active player in the region with similar CBDC projects in Cambodia and Laos. The company has recently announced plans to leverage its experience with local digital currency solutions to build a pan-Asian payment network. Whilst most CBDC experiments have involved private sector technology providers, the overwhelming majority of these experiments, to date, have not involved participation from other private sector actors.
Bokolo Cash will be equivalent to one Solomon Islands dollar, and citizens will be able to use it for transactions in retail environments within the capital city of the island nation, Honiara, as well as for person-to-person transfers. Soramitsu has released the preliminary technical characteristics of the proposed solution. Notably, besides the project’s private blockchain, commonly used in such cases, the company also plans to test a connection with a public blockchain to facilitate cross-border remittances. The Solomon Islands, a nation consisting of over 900 islands located around 1700km northeast of Australia, announced the launch of its Central Bank Digital Currency (CBDC) proof-of-concept project this week. The prime minister of the country, Manasseh Sogavare, addressed the official launch ceremony, calling it a ‘historic moment for the Solomon Islands’. The island nation moved to a pilot phase on its CBDC project together with FinTech firm Soramitsu.
Named after the traditional Solomon Islands currency made from shells, Bokolo Cash serves as a digital counterpart of the Solomon Dollar. It is issued by the CBSI and is available as tokens for Proof of Concept (PoC) participants. Each Bokolo is equivalent to one Solomon Islands dollar and is recognized as a legal tender within the PoC, facilitating seamless transactions among participants and businesses.
