The Solomon Islands is in the launch phase. On November 28, 2023, Central Bank of Solomon Islands governor Luke Forau announced the November 1 launch of its CBDC (referred to as Bokolo Cash) in a “proof of concept pilot project.” The project is in collaboration with the company Soramitsu and funded by the Japanese government. However, this pilot does not appear to be limited to a closed environment. Like the programs labeled as pilots in China, India, Russia, and elsewhere, the CBDC experiment in the Solomon Islands involves real people making real transactions at real businesses. Therefore, the Solomon Islands is considered to be in the launch phase.

Central Bank of Solomon Islands governor Luke Forau said the main motivation for the CBDC is to “increase access to and use of financial services, thereby expanding and deepening our effort in promoting financial inclusion in the country.” However, governor Forau also wants the CBDC to replace cash in the Solomon Islands—a point International Monetary Fund managing director Kristalina Georgieva recommended earlier in November 2023.

The company developing the CBDC, Soramitsu, reported that the CBDC is built on a “Hyperledger Iroha 2-based permissioned blockchain network.” Soramitsu further explained that the CBDC “will be accepted at selected merchants in Honiara by” participants in the pilot. Users will undergo two-tier know-your-customer, or KYC, identity verification. As noted above, it is because of this public involvement that the CBDC is considered to be in the launch phase. However, it is unclear at this time just how many people and businesses the initial project will be limited to.

The Solomon Islands earned a 76 out of 100 in Freedom House’s 2023 Freedom in the World report. While a decent score, some concerns do persist in the country. As Freedom House and the U.S. State Department have explained, corruption poses a significant problem for the Solomon Islands. Unfortunately, the adoption of a CBDC could worsen this issue.

“Corruption and abuse of office are serious problems,” according to Freedom House. Although anti-corruption legislation was passed, Freedom House reported that the legislation was considered “ineffective” and “allowed the use of local custom as a defense in corruption cases and restricted retroactive application.” The U.S. State Department reported similar concerns saying, “While the law provides criminal penalties for corruption by officials, the government implemented the law inconsistently; officials sometimes engaged in corrupt practices with impunity; and corruption was widely held to be pervasive in the government, especially with respect to the forestry, mining, and fisheries sectors.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.