SBI plots cross‑border yen-won stablecoin rails on Canton Network
SBI Group is laying the groundwork for a new cross‑border payment corridor between Japan and South Korea, built on the Canton Network and initially powered by test tokens rather than live stablecoins. The initiative, branded Project Musubi, is a joint effort between SBI Digital Practice (SBIDP) and South Korean blockchain infrastructure company Nodeinfra.
Under a memorandum of understanding signed on August 7, the partners plan to design and test an institutional payment and settlement network that connects Japanese and Korean financial institutions. In its first phase, the system will rely on yen‑ and won‑denominated test tokens, with a roadmap to migrate toward fully regulated stablecoins once legal frameworks in both markets mature.
Targeting the dollar’s intermediary role
Today, a large share of cross‑border transactions between Japan and South Korea still relies on the U.S. dollar as an intermediary currency. Corporates and financial institutions often convert yen to dollars and then dollars to won, introducing additional spreads, operational steps and settlement risk.
Project Musubi is explicitly designed to bypass that structure. Instead of sequential conversions that clear through the dollar, the new network aims to settle yen-won exchanges simultaneously on Canton. SBI argues that eliminating the dollar leg can reduce friction, cut costs and improve risk management for institutions active in the corridor.
Atomic payment‑versus‑payment at the core
The network’s planned architecture centers on atomic payment‑versus‑payment (PvP) settlement. In an atomic PvP model, both sides of a currency trade finalize together or not at all. That eliminates the classic “Herstatt risk,” where one party delivers funds but the counterparty fails to complete its side.
Alongside atomic settlement, SBIDP and Nodeinfra intend to support distributed peer netting-allowing participants to offset obligations across multiple trades-and a member‑governed model, in which participating institutions play a role in governing network rules and operations. These design choices are meant to align with institutional expectations for transparency, risk controls and operational resilience.
Test tokens first, regulated stablecoins later
Crucially, Project Musubi is not launching as a live commercial stablecoin service from day one. The initial testing environment will use a yen test token and a won test token created purely for sandbox purposes. These tokens will allow banks and other institutions to trial the system’s logic, settlement flows and integration points without triggering full regulatory requirements associated with real‑world stablecoins.
Both companies emphasize that the end goal is to employ regulated yen‑ and won‑denominated stablecoins. Movement in that direction will depend on how quickly and clearly regulators in Japan and South Korea finalize rules for issuing and circulating such digital assets. For now, there is no announced go‑live date, no confirmed list of participating financial institutions and no commitment on which specific stablecoins will ultimately be used.
Role allocation: SBI Digital Practice and Nodeinfra
SBI Digital Practice will concentrate on building the integration layers that bridge existing Japanese financial infrastructure with the Canton‑based network. Leveraging SBI Group’s relationships, SBIDP is expected to onboard domestic banks, exchanges and other financial intermediaries, ensuring that the new system can plug into Japan’s current settlement and custody frameworks.
Nodeinfra, on the other hand, will lead development of the core settlement protocol. That includes writing and maintaining Daml‑based smart contracts, producing developer tools and supporting technical integration for Korean financial institutions and custodians. By dividing responsibilities along jurisdictional and technical lines, the partners hope to accelerate build‑out while respecting local regulatory and market nuances.
Existing yen stablecoin infrastructure in Japan
SBI’s Japanese infrastructure is already a step ahead. In June, the group launched JPYSC via SBI Shinsei Trust Bank, describing it as Japan’s first trust‑type yen stablecoin. JPYSC entered circulation on June 24, with SBI VC Trade responsible for primary distribution to market participants.
Despite this head start, the Musubi announcement stops short of committing to JPYSC’s use in the initial testing environment. Instead, SBIDP frames Musubi as part of a broader strategy to interconnect SBI’s various on‑chain initiatives, with Ryo Shimotsu, representative director of SBI Digital Practice, signaling an intent to link the new network to the group’s wider digital asset infrastructure as the ecosystem matures.
A freshly refocused SBI Digital Practice
SBI Digital Practice itself is a relatively new configuration. The entity emerged in June from a rebranding and strategic shift of what was previously known as SBI Security Solutions. The revamped organization now centers its mandate on institutional on‑chain finance, with the Canton Network serving as a key pillar for cross‑border, multi‑currency financial infrastructure.
This restructuring reflects SBI’s belief that financial markets are moving toward interoperable networks where tokenized assets, stablecoins and traditional instruments can coexist and settle under shared, programmable rules. Project Musubi functions as one of the early concrete use cases within that broader vision.
Korea’s regulatory clock is ticking at a different pace
While Japan has already allowed the issuance of certain types of stablecoins under trust‑based models, South Korea is still shaping a comprehensive regulatory regime for digital assets, including won‑denominated tokens. Lawmakers are working toward a Digital Asset Basic Act, which is expected to cover issuance, circulation, consumer protection and prudential requirements.
However, many details remain under negotiation. This regulatory gap is one of the main reasons Project Musubi begins with test tokens instead of a fully regulated won stablecoin. SBI and Nodeinfra stress that the system will shift to compliant stablecoins only when both countries’ regulatory frameworks are sufficiently clear. For now, no prospective won stablecoin issuer has been publicly named, and no timeline has been given for the transition from testing to production.
Near‑term priorities: technology and institutional onboarding
In the immediate future, the partners are focused on two tracks: technical build‑out and institutional engagement. On the technical side, Nodeinfra is refining the settlement protocol, developing smart contracts and ensuring that the network can provide institutional‑grade reliability, privacy and compliance controls on Canton.
In parallel, SBI Digital Practice is working with Japanese financial institutions to evaluate requirements, integration paths and potential use cases. That includes mapping how Musubi could fit into existing treasury operations, FX workflows, correspondent banking relationships and digital asset strategies. Korean institutions will undergo a similar process with support from Nodeinfra, aligning technical capabilities with local business needs and regulatory expectations.
Potential use cases for corporates and financial institutions
If Project Musubi achieves its objectives and moves into production, the network could unlock several practical applications:
– Corporate cross‑border payments: Exporters and importers between Japan and South Korea could execute near‑instant yen-won settlements at lower cost, improving cash‑flow management and reducing FX risk windows.
– Interbank FX and liquidity management: Banks might use the network for intraday liquidity balancing, FX swaps or cross‑border collateral movements, benefiting from atomic PvP settlement.
– Tokenized assets and collateralization: Over the longer term, stablecoins on Musubi could serve as collateral in digital asset markets or be used alongside tokenized securities, enabling new capital markets structures.
– Remittances and fintech services: Licensed payment service providers could potentially plug into the corridor to offer faster consumer remittances, subject to regulatory permissions.
These use cases remain prospective, but they illustrate why SBI and Nodeinfra describe Musubi as a future standard for Japan-Korea payment infrastructure rather than a narrow pilot.
How Canton Network shapes the design
Choosing Canton as the underlying infrastructure is not incidental. Canton is positioned as a privacy‑enabled, interoperable network tailored to institutional finance. It allows segmented data sharing, meaning that transaction details can be visible only to authorized parties while still benefiting from shared settlement logic and interoperability across applications.
For regulated institutions, this architecture is attractive because it combines aspects of public‑network programmability with permissioned controls and compliance features. On Musubi, that should translate into transaction privacy, flexible governance and the ability to integrate with other Canton‑based applications and asset platforms as the ecosystem expands.
Expansion beyond the Japan-Korea corridor
SBI and Nodeinfra do not see Musubi as limited to just two currencies or two countries. Their published roadmap includes ambitions to extend the network to other corridors, currencies and asset classes. That could involve connecting additional Asian markets, integrating different types of stablecoins or linking tokenized securities and other on‑chain instruments into the same settlement fabric.
For now, these plans remain aspirational. The partners acknowledge that any expansion will depend on successful completion of the initial testing phase, buy‑in from regulated institutions and sufficient legal certainty around stablecoin issuance in each new market. Still, by architecting Musubi as a multi‑jurisdictional, multi‑asset network from the outset, they aim to avoid the limitations of single‑corridor pilots.
What to watch next
For observers tracking the evolution of institutional stablecoin use in Asia, several milestones around Project Musubi will be particularly telling:
1. Completion and results of the test‑token phase: This will show whether the network’s atomic PvP and netting mechanisms function as planned under realistic transaction volumes and complexity.
2. Public identification of participating institutions: The caliber and diversity of banks, exchanges and custodians that choose to join will indicate market confidence.
3. Regulatory developments in South Korea: Progress on the Digital Asset Basic Act and specific guidance for won‑denominated stablecoins will shape the feasibility and timing of a production launch.
4. Formal decisions on stablecoin issuers: Announcements of which yen and won stablecoins will be used-and under what structures-will clarify Musubi’s long‑term risk and compliance profile.
5. Integration with other on‑chain infrastructures: How Musubi connects to existing SBI platforms, tokenization projects and broader Canton‑based ecosystems will reveal its role in the emerging digital financial architecture.
Strategic significance for regional finance
If successful, Project Musubi could become a template for building regional payment networks that do not rely on the U.S. dollar as an intermediary, while still operating within regulated, institution‑friendly environments. For Japan and South Korea, it represents an attempt to modernize their bilateral financial plumbing, aligning it with the broader shift toward tokenized money and programmable settlement systems.
By starting with a controlled test‑token environment, SBI Digital Practice and Nodeinfra are trying to balance innovation with regulatory prudence. The path from pilot to production will hinge on policy decisions, technical robustness and institutional trust-but the project signals that the race to define the next generation of cross‑border payment infrastructure in Asia is well underway.