Key Takeaways
- The test moved value from Japan to South Korea without using dollars.
- Canton processed the exchange and settlement in a test environment.
- The companies plan further work involving investment and tokenized assets.
SBI and Kyobo Test Direct Yen-Won Settlement
Cross-border institutions could eventually move funds between Japan and South Korea without routing them through the U.S. dollar under a structure tested by SBI Digital Practice and Kyobo Life. The companies disclosed the completed cross-border transaction pilot on Sept. 17 after examining the full process for transferring, exchanging, settling, receiving, and holding digital tokens.
The project began in July and tested a direct conversion between tokens modeled on yen- and won-denominated stablecoins. According to Kyobo Life’s account of the pilot, the structure moved value from Japan to South Korea without first converting yen into dollars and then converting those dollars into won. Kyobo described the trial as the first case in South Korea’s insurance industry to verify the entire cross-border transfer, exchange, and settlement process for institutional funds.
The demonstration used test tokens rather than commercially issued stablecoins and ran in a Canton Network test environment. SBI Digital Practice, a wholly owned subsidiary of SBI Holdings focused on Canton-related businesses, sent the yen-linked token from Japan. SBI Holdings also holds a stake in Kyobo Life, which it treats as an affiliate in its financial statements. The process covered cross-border exchange and settlement before Kyobo received the resulting token in South Korea.
Pilot Bypasses Dollar Conversion on Canton
Traditional Japan-Korea transfers can pass through several financial institutions and international payment networks, increasing the number of conversion and settlement steps. Kyobo reported that the pilot confirmed the technical feasibility of shorter processing times, lower intermediary conversion costs, and real-time transaction tracking. Those results represent the companies’ assessment of a controlled test rather than commercial performance data.
Canton Network is a public blockchain designed for regulated financial institutions, with privacy and controls intended to limit transaction information to relevant participants. The ecosystem has also added onchain identity and compliance tools for institutions, addressing operational requirements that become important when test transactions progress toward production systems involving regulated assets and counterparties.
In general, stablecoins are digital assets designed to track a reference asset, commonly a national currency. Their programmable format can support payments, remittances, treasury transfers, and settlement through blockchain networks. In this pilot, however, the tokens simulated prospective yen and won stablecoins, so the result established a technical and operational model rather than a live service.
Institutions Explore Local-Currency Stablecoin Rails
The trial arrives as SBI expands its separate work on regulated digital currencies and institutional settlement. JPYSC, an SBI-backed yen stablecoin launched in June under a trust-bank structure, targets corporate treasury activity, high-volume settlement, cross-border payments, and tokenized assets. The Kyobo pilot used a test asset, while JPYSC is a separate commercial initiative.
South Korean financial institutions are also evaluating blockchain systems that can settle foreign exchange without routing every transaction through a major intermediary currency. A separate project involving Chainlink and more than 10 Korean lenders is examining direct stablecoin-based foreign exchange settlement, reflecting a wider institutional effort to shorten settlement cycles and reduce exposure created by delayed transactions.
The Japan-Korea pilot extends broader blockchain settlement work already underway at SBI Group and Kyobo. SBI Holdings has partnered with Ripple since 2016 through SBI Ripple Asia, while Kyobo is working with Ripple to test tokenized South Korean government bond settlement through Ripple Custody and explore stablecoin payment rails for around-the-clock transactions.
SBI Digital Practice and Kyobo plan to explore further cooperation in digital asset conversion, overseas investment, asset management, and tokenized-asset transfers. Kyobo also tested procedures for receiving, storing, and managing digital assets and related settlement funds in South Korea. The companies expect that work to support future financial operations if the necessary legal frameworks and market infrastructure develop.
