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. 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’.
Because SORA is not owned by any country, it is ideal for central banks to use without worrying about political exposure, so in the future, other central banks could bridge their CBDCs to SORA as well, which will aid remittances between multiple jurisdictions. The Solomon Islands have joined the list of several countries working on central bank digital currencies (CBDCs). Japanese blockchain firm Soramitsu has partnered with the Central Bank of Solomon Islands for the project.
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. Notably, the Eastern Caribbean countries have already embraced an official CBDC known as DCash. “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.
Through this connectivity, users will have the ability to conduct transfers using QR codes and leverage the self-custody Fearless Wallet, a product developed by Soramitsu. As the first media outlet to report on blockchain-powered applications, we provide early adopters, developers, and visionary leaders with access to emerging technological landscapes, including wallets and games. CoinGeek presents a unique perspective on blockchain, AI, and Web3, emphasizing the BSV blockchain’s robust enterprise utility and unbounded scalability, as described by Satoshi Nakamoto in his 2008 Bitcoin white paper. The Central Bank of Solomon Islands (CBSI) has begun the proof-of-concept process for a local CBDC called Bokolo Cash.
Additionally, the CBDC will be tested in a wholesale setting, for interbank payments between the CBSI and/or commercial banks. A Bokolo Cash wallet allows PoC participants and merchants to manage their CBDC tokens on their mobile devices. Within the PoC, users will be able to seamlessly scan a standardized QR code with their Bokolo Cash wallet to send instant cash payments to merchants or make peer-to-peer cash transfers. Users will undergo two-tier Know Your Customer (KYC) identity verification, including eKYC, keeping in line with international regulations. After the PoC is completed, Bokolo Cash CBDC tokens will not retain any value at merchants or within the broader ecosystem. These tokens are accepted as legal tender within the confines of the PoC, with individual participants and businesses being able to send and receive Bokolo Cash between each other and receiving Bokolo Cash for payments.
The firm says that since no country owns SORA, the possibilities of political exposure have been reduced to the barest minimum, encouraging central banks to bridge their CBDCs to the network. Available sources show that the Solomon Islands’ PoC is exploring the concept of a wholesale CBDC to support interbank transactions using blockchain technology. Participants will undergo extensive Know Your Customer (KYC) verification in line with local and international best practices. The Solomon Islands has signaled its intention to start exploring a central bank digital currency (CBDC) via the launch of a proof-of-concept (PoC) to test the waters. The island nation moved to a pilot phase on its CBDC project together with FinTech firm Soramitsu.
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. The company’s technology is the foundation of the Cambodian bakong and the Lao DLak, and it has recently embarked on a project that integrates the bakong with stablecoins for regional cross-border payments. In his speech Sogavare described the CBDC initiative as a catalyst to include all citizens, especially those living in remote locations, in the country’s formal economy. The central banks of Fiji, Vanuatu, Samoa, Tonga, Australia, New Zealand and Papua New Guinea were also present in the ceremony. 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.
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. The CBDC’s demonstration experiment was marked by a ceremony on November 28, 2023, attended by prominent figures including the Prime Minister of Solomon Islands, central bank governors, and representatives from various Pacific nations. The event highlighted the potential of CBDC in transforming the financial sector and its beneficial impact on the economy and technology sectors. With the Prime Minister of the Solomon Islands lending support to the CBDC project, adoption could increase exponentially in the Solomon Islands.
