SBI Digital Practice and South Korean insurer Kyobo Life Insurance have completed a demonstration project testing whether stablecoins can be used to transfer institutional funds between Japan and South Korea without routing transactions through the U.S. dollar.
The project, which began in July, tested the transfer, currency conversion and settlement of funds using yen- and won-denominated stablecoin representations on the Canton Network’s test environment.
The companies said the test was designed to examine an alternative structure for cross-border transactions and how blockchain could be used to track transaction information and handle settlement. The demonstration used test tokens rather than actual stablecoins or institutional funds, meaning the project was a technical and operational test rather than a live payment service.
SBI And Kyobo Life Test Direct Yen-Won Stablecoin Transfers
The project was conducted by SBI Digital Practice, part of Japan’s SBI Group, and Kyobo Life Insurance as a cross-border demonstration project between Japan and South Korea. According to the SBI Group announcement, the companies tested a transaction structure in which a yen-denominated stablecoin could be exchanged directly for a won-denominated stablecoin.
The test was conducted through the Canton Network’s test environment, a blockchain infrastructure designed for financial institutions. Instead of using an intermediary currency, the demonstration modeled a direct yen-to-won conversion.
The approach differs from a conventional route in which yen could first be converted into U.S. dollars before being converted into won. The companies tested the process across several stages, including the transfer of institutional funds between countries, currency conversion and settlement. Kyobo Life said the project also examined the handling of digital assets transferred from overseas and the related settlement funds within South Korea.
The project did not involve actual customer or institutional money. Reporting by Yonhap and Seoul Economic Daily states that test tokens were used in the Canton Network environment to represent the yen- and won-based stablecoins.
Kyobo Life described the project as the first case in South Korea’s insurance industry in which the full process of cross-border institutional fund transfer, foreign-exchange conversion and settlement was tested using stablecoin-based infrastructure. The company’s comments concern the scope of the demonstration and do not indicate that a commercial service has been launched.
The companies said the demonstration allowed them to examine whether reducing the number of currency-conversion steps could affect the processing of cross-border transactions. However, the test itself does not establish how the structure would perform with live funds or at larger transaction volumes.
Test Examines Alternative To Dollar-Based Cross-Border Transfers
A central part of the demonstration was the attempt to move between yen and won without using the U.S. dollar as an intermediary currency. Under the structure tested by SBI Digital Practice and Kyobo Life, the yen-denominated stablecoin could be exchanged directly for its won-denominated counterpart.
The companies said this could reduce the number of conversion steps involved in a cross-border transaction. Kyobo Life also said the demonstration examined whether blockchain could provide real-time confirmation and tracking of transaction information. These are potential applications identified through the test rather than results from a commercial payment network.
The demonstration also comes as SBI Group continues to develop its stablecoin-related business. In its financial results presentation, SBI said it was working toward a global stablecoin payment framework involving yen- and U.S.-dollar-denominated stablecoins.
SBI Digital Practice had also announced in August that it planned to work with South Korean technology company Nodeinfra on a Japan-Korea cross-border payment and settlement network using the Canton Network. The SBI announcement said the initiative would initially focus on stablecoin-based payment and settlement infrastructure.
For the Kyobo Life project, however, the immediate result is limited to the completed demonstration. The companies said future cooperation could include digital-asset conversion between Japan and South Korea, links with asset management and other Web3 financial applications.
Kyobo Life also noted that relevant regulations and financial infrastructure would need to be in place for the model to be used more broadly. The test therefore provides an example of how financial institutions are evaluating stablecoins for cross-border settlement, while leaving questions around regulation, infrastructure, commercial deployment and the handling of real funds for any future implementation.
