Japan's Digital Yen Hopes Hang by a Thread Amid Stablecoin Surge

The Bank of Japan's CBDC pilot system has achieved a significant milestone by handling 50,000 transactions per second in testing. The mixed workload test combined 10,000 payment transactions with 40,000 balance inquiries that hit the database simultaneously.

The central bank's countermeasure to address 'single-account concentration' was 'record splitting,' which broke an account balance into multiple database records so credits and debits can be processed in parallel. With proper tuning, throughput on a single account rose to 6,000 TPS.

While the BoJ says no technical knockout factor has been found for scaling to 500,000 TPS, it acknowledges that building a production system would be significantly harder than the pilot. The central bank's own chart shows technical difficulty climbing off the scale as volumes rise past 100,000 TPS.

The reorganization of the BoJ's CBDC Forum is another significant development. The seven working groups are being merged into three discussion groups: CBDC architecture, the CBDC ecosystem, and new technologies. The new technologies group will cover stablecoins, tokenized deposits, DLT-related technologies, asset tokenization, and programmability.