The State of Crypto Adoption in Solomon Islands
Source: Envato
The Central Bank of Solomon Islands (CBSI) continues to warn the public against investing in private cryptocurrencies. They point out several concerns: cryptocurrencies are very risky due to their volatile values, and they can potentially be used for illegal activities like tax evasion and money laundering.
The bank makes it clear that private assets like Bitcoin are not legal tender in the Solomon Islands, and people who invest in them do so entirely at their own risk.
However, the country is taking a distinctly different approach with its own sovereign digital currency, Bokolo Cash. Unlike decentralized cryptocurrencies, Bokolo Cash is a government-backed Central Bank Digital Currency (CBDC) that is being tested in partnership with Soramitsu, a Japanese technology provider.
“These cryptocurrencies do not have any legal tender status to be accepted as a currency in the Solomon Islands. The Central Bank hereby warned the public that investment in such digital currencies is considered very risky and speculative,” the CBSI stated regarding private tokens.
Conversely, each Bokolo Cash is worth exactly one Solomon Islands dollar. The pilot project allows participants to use it in retail settings in the capital, Honiara, and for person-to-person transfers. The system uses QR codes and a specialized wallet, the Fearless Wallet, an application to facilitate these transactions, operating on a permissioned blockchain.
The administration, under Prime Minister Jeremiah Manele (who succeeded Manasseh Sogavare in May 2024), supports this digital transformation as a means to improve financial inclusion. This puts the Solomon Islands in the same group as other Pacific island nations exploring digital currencies, though strategies vary across the region.
For example, while the Solomon Islands focuses on a sovereign CBDC, other jurisdictions like the Eastern Caribbean have deployed DCash, and nations like Vanuatu have seen private crypto real estate projects.
Crypto Law In Solomon Islands
Source: Envato
The Solomon Islands currently does not have specific legislation that explicitly bans the ownership of private cryptocurrency, nor does it have laws to license it.
The country’s central bank, CBSI, has made it clear that cryptocurrencies like Bitcoin and Ethereum are not recognized as official money. This means you cannot force a merchant to accept crypto as you would with regular Solomon Islands dollars.
While people can technically buy and trade cryptocurrency, the central bank has warned everyone that it is unregulated. They worry that people might lose their money because crypto prices can change quickly, and there is no guarantee that others will accept it as payment.
There is no guarantee that private cryptocurrencies will be accepted as a medium of exchange or will hold their value.
The bank does not regulate or supervise private crypto trading, which means there is no official protection if an exchange fails. However, if someone uses cryptocurrency to commit fraud or other crimes, they can still be punished under regular Solomon Islands laws.
To address growing digital risks, the government introduced its first National Cyber Security Policy in August 2024.
This policy aims to protect the nation’s digital infrastructure and was followed by the establishment of the Solomon Islands Computer Emergency Response Team (SICERT) in April 2025. The government may create new rules specifically for crypto assets in the future, but for now, private trading exists in a “grey area” while the state focuses on its own Bokolo Cash.
Current Economic Situation In Solomon Islands
Source: Envato
After facing significant economic headwinds in previous years due to the global pandemic and civil unrest, the nation is now in a period of recovery.
While the economy contracted by 7.3% in 2022, recent data indicates a return to positive capability. For 2025, the Real GDP growth is projected at 2.7%, with a nominal GDP estimated at $1.9 billion.
Inflation remains a consideration, with projected consumer price increases of 3.4% for 2025. In this recovering economic climate, digital currencies could help local businesses trade more easily with international partners, especially since traditional banking services can be limited on the islands.
Blockchain technology could also help track and manage the country’s important industries like fishing and agriculture, making them more efficient. The current approach is to test these solutions through the state-backed CBDC pilot, covering retail and simulated cross-border payments, while maintaining the traditional financial system.
This aligns with the broader ICT strategy, which includes new infrastructure projects such as the Chinese-built broadband towers commissioned to link remote villages in Guadalcanal and Malaita and create a stronger economy.
Challenges to Crypto Adoption in Solomon Islands
Source: Envato
Crypto adoption in the Solomon Islands faces several challenges:
Regulatory Uncertainty
The Central Bank of Solomon Islands (CBSI) maintains that private cryptocurrencies are not legal tender. This creates a lack of clarity for businesses that might want to accept Bitcoin or stablecoins.
Digital Literacy
Recent reports indicate a significant knowledge gap among the general public. Many citizens remain unaware of what blockchain or CBDCs are, often viewing Bokolo Cash as just another government policy rather than a technological tool they can use.
Hence, a need for increased public awareness and education about the benefits and risks associated with cryptocurrencies.
Infrastructure and Fragmentation
The nation relies on two primary terrestrial ICT providers, Our Telekom and Bmobile, and internet costs remain a barrier for many.
Furthermore, the Bokolo Cash system runs on a blockchain utilizing an Alternative Naming System (ANS), which presents technical hurdles in reconciling with the global Domain Name System (DNS) managed by ICANN.
Consumer Protection
There are concerns about fraud, market manipulation, and operational disruptions within the cryptocurrency market. The government has implemented guidelines to address these issues, but it remains a significant challenge.
Market Volatility
Cryptocurrencies are known for their price volatility, which can deter potential investors and users who prefer more stable financial options.
Cybersecurity Threats
Ensuring the security of digital assets is a major concern. While the National Cyber Security Policy (2024) and the launch of SICERT (2025) are positive steps, the country is still building its capacity to defend against sophisticated financial cyber-attacks.
Compliance Requirements
The evolving regulatory framework, particularly for the CBDC pilot, requires strict adherence to anti-money laundering (AML) and know-your-customer (KYC) protocols.
This can be a hurdle for smaller players or unbanked citizens attempting to enter the digital financial system.
Potential Benefits of Crypto Adoption in Solomon Islands
Source: Envato
Despite the restrictions on private crypto, the adoption of blockchain technology (via the CBDC) could bring several potential benefits. Let’s delve into these benefits in more detail:
Reduced Transaction Costs
Traditional banking and remittance services often come with high fees, which can be a burden for individuals and businesses. Cryptocurrencies can significantly reduce these costs, making transactions more affordable.
The Bokolo Cash pilot specifically includes testing for wholesale transfers and cross-border payments, aiming to bypass the expensive correspondent banking network.
Increased Transparency
Blockchain technology, which underpins cryptocurrencies, ensures that transactions are securely recorded and transparent.
This can reduce the risk of fraud and corruption, which is particularly important in regions where these issues are prevalent.
For example, government aid programs or Constituency Development Funds (CDF) could use blockchain to track the distribution of funds, ensuring they reach the intended beneficiaries.
Technological Advancement
Embracing digital currencies can position the Solomon Islands at the forefront of technological innovation in the Pacific. This encourages further advancements in the financial sector and e-commerce.
Also, the launch of the National E-Commerce Strategy 2022-2027 and the ongoing partnership with Soramitsu demonstrate a commitment to leveraging technology for inclusive development.
Conclusion
While the government of the Solomon Islands continues to warn against using unregulated cryptocurrencies like Bitcoin, they are aggressively pursuing their own digital money, Bokolo Cash. This duality—rejecting private crypto while embracing state-backed blockchain—shows they recognize the technological benefits but prefer a controlled implementation.
With the economy projected to grow by 2.7% in 2025 and new leadership under Prime Minister Jeremiah Manele, digital currency solutions could play a vital role in the nation’s financial recovery.
However, success will depend on improving digital literacy, securing the cyber environment through the new National Cyber Security Policy, and ensuring the infrastructure can support widespread adoption.
