SBI Digital Practice drives Japan-Korea stablecoin network development
SBI Digital Practice, a subsidiary of Japan’s financial giant SBI Holdings, and South Korean firm Nodeinfra have agreed to jointly develop a cross-border stablecoin payment network. This initiative, dubbed “Project Musubi,” aims to connect Japan and South Korea using the Canton Network infrastructure. The memorandum of understanding (MoU) for this project was officially signed on August 7, 2026.
The core objective of Project Musubi is to enable direct payment-versus-payment (PvP) settlement using yen, won, and dollar-denominated stablecoins, along with tokenized assets. It marks a significant step towards reducing reliance on the U.S. dollar as an intermediary currency in Japan-Korea transactions, a process SBI says introduces unnecessary friction and settlement risk.
Establishing a new payment infrastructure
The Canton Network, known for its privacy-first distributed ledger technology (DLT), will form the backbone of this new payment infrastructure. SBI Digital Practice, based in Roppongi, Tokyo, will be responsible for building integration layers. These layers will connect traditional financial systems to the Canton Network, helping onboard Japanese financial institutions. This push for advanced infrastructure solutions mirrors trends seen in other high-tech sectors.
Nodeinfra, the South Korean partner, will take the lead on developing the core payment protocol. They’ll also create Daml smart contracts and developer tools. Additionally, Nodeinfra will oversee the onboarding of Korean financial institutions and custodians, leveraging their expertise in DLT and smart contract development.
The role of Canton Network technology
Canton Network brings robust capabilities to Project Musubi, connecting over 600 institutions and supporting more than $6 trillion in assets. SBI has been an active participant in Canton as a Super Validator, a role crucial for transaction approval and management. This network is specifically designed for regulated financial institutions, emphasizing privacy and compliance.
The project’s planned architecture features atomic payment-versus-payment settlement, which ensures both sides of a transaction complete simultaneously. This mechanism drastically reduces the risk of one party fulfilling its obligation while the other fails. Distributed peer netting further enhances efficiency by allowing direct settlement between participants.
Initial testing with yen and won tokens
The first phase of Project Musubi will involve the use of yen-denominated and won-denominated test tokens. This approach allows SBI and Nodeinfra to thoroughly test the network’s functionality and security without immediately engaging with live commercial stablecoins. The companies haven’t provided a commercial launch date, nor have they named specific banks or payment firms that will participate initially.
This phased rollout is critical, especially given the varying stages of stablecoin regulation in both Japan and South Korea. The partners intend to transition to regulated stablecoins once the legal frameworks in each market are sufficiently established. It’s a pragmatic step for a complex international financial undertaking.
Japan’s stablecoin progress and SBI’s ecosystem
Japan has already made strides in the stablecoin space, with SBI playing a central role. SBI launched its yen stablecoin, JPYSC, in June 2026.
Separately, SBI’s trust bank launched JPYC, Japan’s first trust-type yen stablecoin, on June 24, 2026. JPYSC is currently confined to the SBI VC Trade platform, pending further regulatory and tax clarification.
SBI’s broader on-chain strategy extends beyond JPYSC. The company invested in Digital Asset, the developer of Canton, in June 2026. Moreover, SBI Global Asset Management recently partnered with DigiFT in July 2026 to launch the SBI Japan High Dividend Equity Strategy Token (JX token) on Solana.
This shows a clear intent to build a comprehensive digital asset ecosystem, which Project Musubi will eventually integrate with. SBI also agreed with Ondo Finance to tokenize Japanese equities using JPYSC for settlement and collateral.
The establishment of SBI Digital Practice Co. Ltd. earlier this year underscores this strategic shift. Formerly SBI Security Solutions, the subsidiary was renamed and restructured in June 2026. Its new focus is specifically on institutional on-chain finance and specializing in the Canton Network, reflecting SBI’s commitment to this emerging sector.
South Korea’s regulatory hurdles and global pressures
South Korea faces a more complex regulatory environment for stablecoins. The nation is actively developing legislation for won-denominated digital assets under a broader Digital Asset Basic Act. Policymakers are working to finalize rules covering issuance and circulation, but key provisions remain under negotiation, with multiple bills in the National Assembly. This mirrors a broader trend of significant financial technology investments in evolving digital economies.
A unified bill is expected next month, with passage by year-end. This legislative uncertainty helps explain why Project Musubi begins with test tokens, as regulated stablecoins can only be adopted when the legal landscape permits. There’s also growing concern in South Korea that the U.S.
GENIUS Act, effective January 2027, could lead to the proliferation of dollar stablecoins before a won alternative is fully established, potentially impacting domestic financial stability. The ongoing debate around crypto regulation highlights the complexities inherent in adopting these new financial instruments, a situation seen in various jurisdictions as regulatory bodies grapple with rapidly evolving technology.
The path forward for stablecoin legislation remains a critical dependency for the commercial rollout of won-denominated stablecoins. Delays or changes in the Digital Asset Basic Act could significantly influence the timeline for Project Musubi to move beyond its initial testing phase. It’s a waiting game for both regulators and innovators.
Broader implications for cross-border finance
If successful, Project Musubi could set a new benchmark for regional cross-border payments. The current system often involves multiple intermediaries and foreign exchange conversions, adding cost and time. Direct payment-versus-payment settlement on a DLT network like Canton offers a more efficient and less risky alternative.
This move by SBI and Nodeinfra aligns with a global trend of financial institutions exploring blockchain for clearing and settlement. It signals a shift towards tokenized assets and instant settlement, which could revolutionize international trade and remittances. The project’s success could also encourage other regional powers to adopt similar blockchain-based solutions for their own currency corridors.
The road ahead for Project Musubi
The immediate focus for SBI Digital Practice and Nodeinfra is on technical development and institutional onboarding. SBI Digital Practice will continue connecting Japanese financial infrastructure. At the same time, Nodeinfra will drive the core protocol and smart contract development, alongside bringing Korean institutions into the fold.
While the partners eventually plan to expand Project Musubi beyond the Japan-Korea corridor, this remains a future aspiration. Such an expansion would encompass additional currencies, jurisdictions, and asset classes. The next concrete milestones will be the completion of the testing phase, confirmed participation from regulated institutions, and the necessary regulatory clarity to introduce commercial stablecoins.
Without stable and clear guidelines, broader crypto market stability remains elusive, a challenge regulators across the globe are currently navigating.
The journey from test tokens to fully regulated commercial stablecoins is fraught with both technical and legal challenges. However, the potential for significantly more efficient and less costly cross-border transactions provides a powerful incentive for these financial heavyweights. Their commitment to leveraging cutting-edge DLT solutions highlights a forward-thinking approach in the rapidly evolving digital finance world.