Canton.network
Japan’s SBI Digital Practice and South Korea’s Nodeinfra have built a direct blockchain settlement corridor between the yen and the won, using Canton Network’s atomic payment-versus-payment architecture to eliminate the US dollar intermediary that currently costs both legs of every Japan-Korea trade — and their commercial launch depends entirely on South Korea’s stalled won stablecoin legislation clearing its National Assembly before year’s end. The two firms signed a Memorandum of Understanding on August 7, 2026 for what they are calling this cross-border settlement initiative Project Musubi — an institutional blockchain payment network that will allow yen-denominated and won-denominated tokens to settle against each other directly, without routing through correspondent banks that currently convert JPY to USD, then USD to KRW in two sequential hops.
The MOU was announced on August 7, 2026. SBI Digital Practice will construct the integration layers connecting Japan’s existing financial systems to the Canton network. Nodeinfra, a Seoul-based digital asset software provider, will lead development of the core settlement protocol, write the Daml smart contracts governing JPY-KRW atomic swaps, build developer tooling, and handle the onboarding of Korean financial institutions and custodians.
What Dollar Intermediation Actually Costs
The dollar sits between the yen and the won not because Japan and South Korea chose it but because their banks have no direct settlement infrastructure for each other’s currencies. When a Japanese manufacturer pays a Korean parts supplier in won, the payment travels through a correspondent banking chain: the yen are sold for dollars, the dollars are sent through one or more intermediary banks, and the dollars are finally converted into won at the Korean end. Each hop in that chain adds a handling fee — typically $15 to $30 per intermediary — plus a foreign exchange markup of 1 to 3 percent embedded in the conversion rate.
The deeper problem is settlement risk. Between the moment the Japanese party delivers its currency leg and the moment the Korean party delivers its leg, both parties are exposed. If either counterparty fails mid-sequence, the party that has already paid is left without recourse — a structural vulnerability known in finance as Herstatt risk, named after the 1974 collapse of a small German bank, Bankhaus Herstatt, whose New York correspondent suspended outgoing US dollar payments after German regulators closed the institution at 3:30 PM Frankfurt time. The counterparties who had already delivered Deutsche marks received nothing.
The BIS 2025 Triennial Survey found that more than $1.4 trillion in daily foreign-exchange volume is still settled on a gross bilateral basis — fully exposed to Herstatt risk half a century after the event that named it.
How Canton’s Atomic Settlement Eliminates the Risk
Project Musubi solves both problems — cost and exposure — through Canton Network’s atomic payment-versus-payment architecture.
Canton is a permissioned, privacy-preserving Layer-1 blockchain built by Digital Asset specifically for institutional finance. It is organized as a network of subnets — sovereign permissioned environments where individual institutions run their own applications — connected through a shared Global Synchronizer (GS) operated by Super Validators. The GS does not read transaction content; it sequences encrypted messages across subnets and coordinates finality.
In a Project Musubi transaction, the yen leg and the won leg are bundled into a single Daml smart contract submitted to the GS. Daml — Canton’s native smart-contract language, developed by Digital Asset — is declarative rather than imperative: rather than describing how to change ledger state, a Daml contract defines the explicit rights and obligations of each party, with authorization and privacy rules embedded at the contract layer itself.
The GS confirms that both the Japanese institution’s subnet and the Korean institution’s subnet have validated their respective legs. Only if both agree does the GS commit the transaction. The yen and won transfer at the exact same moment. If either leg fails for any reason, neither settles. This is true atomic payment-versus-payment — not netting, not a settlement window, but simultaneous finality. No Herstatt window exists because no window exists.
Project Musubi also adds distributed peer netting, which offsets opposing obligations among participants before they reach the atomic settlement layer, reducing the gross transaction volume that requires atomic coordination. The network includes member self-governance, giving participating institutions voting rights over operational rules.
Canton Network currently hosts more than 600 participating institutions, manages assets exceeding $6 trillion, and processes over $9 trillion in monthly transaction volume, according to SBI’s official announcement. Visa joined as a Super Validator in March 2026 — the first major global payments company to take a governance role on the network. JPMorgan’s Kinexys division is deploying its deposit token on Canton; Goldman Sachs built its Digital Asset Platform on Daml; and the Depository Trust and Clearing Corporation — which processes roughly $2.5 quadrillion in securities annually — is tokenizing US Treasuries on the network.
Japan Has the Yen Side Ready. Korea Does Not.
The two sides of Project Musubi are not symmetrical.
SBI launched JPYSC — Japan’s first trust-bank-backed yen stablecoin, issued by SBI Shinsei Trust Bank — on June 24, 2026, under Japan’s amended Payment Services Act. Classified as a Type III Electronic Payment Instrument, JPYSC carries no transaction cap, unlike earlier yen stablecoins subject to a ¥1,000,000 (approximately $6,281) per-transaction ceiling. That cap-free structure makes it viable for institutional-scale settlements. However, JPYSC remains confined to the SBI VC Trade platform pending further regulatory and tax clarification, and its role in Project Musubi’s test phase has not been confirmed by SBI.
South Korea has nothing comparable on the market. The Digital Asset Basic Act (DABA) — the legislation that would authorize won-denominated regulated stablecoin issuance — remains stalled in the National Assembly, held up by a dispute between the Bank of Korea (BOK), which wants bank-led consortiums to control issuance, and the Financial Services Commission (FSC), which has warned that a 51-percent bank-ownership requirement would suppress fintech competition. The FSC committed on July 29, 2026 to preparing a unified government-backed DABA that would consolidate ten separate bills, targeting passage in the second half of 2026.
This regulatory asymmetry is why Project Musubi begins with test tokens — yen-denominated and won-denominated tokens that represent stablecoin flows without being live regulated instruments — rather than commercial stablecoins. SBI and Nodeinfra say they will adopt regulated stablecoins “when the legal frameworks in each market allow it.” No won stablecoin issuer has been named for the project.
Who Is Building What
SBI Digital Practice — formerly SBI Security Solutions, renamed and repositioned effective June 22, 2026 specifically around Canton Network initiatives — brings SBI Group’s institutional relationships with Japanese banks, securities firms, and asset managers. SBI Group holds a Super Validator role on Canton, making it one of the roughly 42 institutions responsible for approving and managing transactions on the network’s Global Synchronizer. Representative Director Ryo Shimotsu described the partnership’s goal as setting “a new standard” for Japan-Korea payment infrastructure and connecting Project Musubi with SBI’s wider onchain infrastructure as it develops.
Nodeinfra, a Seoul-based digital asset software provider, will lead development of the core settlement protocol, write the Daml smart contracts governing JPY-KRW atomic swaps, build developer tooling, and handle the onboarding of Korean financial institutions and custodians. SBI Digital Practice will construct the integration layers connecting Japan’s existing financial systems to the Canton network.
SBI Digital Practice has not disclosed specific participating banks or exchanges on either side of the corridor.
Why This Matters Beyond Japan and Korea
Japan and South Korea together conducted $73.5 billion in bilateral goods trade in 2025, with Japan exporting $44.64 billion (machinery, electronic components, and semiconductors) and importing $28.89 billion from Korea. In March 2026 alone, Japan exported ¥712 billion (approximately $4.5 billion) to Korea. Every company involved in that trade faces the two-hop dollar routing that Project Musubi is designed to eliminate.
The structural implication extends beyond this specific corridor. If Canton’s atomic payment-versus-payment architecture works for JPY-KRW, it is replicable for any bilateral currency pair where correspondent banking currently imposes two-hop dollar intermediation — EUR-KRW, GBP-JPY, SGD-INR, and dozens of others. Neither the Continuous Linked Settlement system (which handles payment-versus-payment for 18 major currencies through a centralized clearinghouse) nor central bank digital currency projects (which require sovereign participation and operate on government timelines) addresses this problem for emerging bilateral pairs at commercial speed. Project Musubi, if it succeeds, is a template.
Project Musubi joins a growing cohort of institutional blockchain settlement initiatives — including BIS Project Agorá, which proved atomic settlement across six currencies in 80-second transactions in July 2026, and the Kbank-HashKey Korea-Hong Kong KRW stablecoin corridor signed July 21, 2026 — in demonstrating that the infrastructure question for institutional blockchain payments has largely been answered. The remaining questions are regulatory.
For Project Musubi specifically, the answer to those questions runs through Seoul.
Frequently Asked QuestionsWhy does Japan-Korea trade currently go through US dollars at all?
Japanese and Korean banks generally do not maintain direct settlement accounts in each other’s currencies. Without a bilateral JPY-KRW nostro/vostro relationship, payments must route through a currency both banking systems can settle in — typically the US dollar. This is a structural feature of the correspondent banking network, not a policy choice. It means every JPY-KRW trade involves two foreign-exchange conversions and the exposure of both principals during the window between them.
What is atomic settlement, and why does it eliminate Herstatt risk?
Atomic settlement means that multiple interdependent payment legs either all succeed simultaneously or all fail together — there is no state in which one leg has settled and the other has not. Herstatt risk arises specifically from the gap between those two states: one party delivers, and the counterparty fails before delivering in return. By making both legs of a JPY-KRW swap a single indivisible transaction coordinated by Canton’s Global Synchronizer, Project Musubi eliminates that gap. The Daml smart contract that governs the swap cannot partially execute.
When will Project Musubi go live with real yen and won stablecoins?
SBI and Nodeinfra have not announced a commercial launch date. The test phase uses yen and won test tokens, not live regulated instruments. The Japanese side has JPYSC — Japan’s first trust-bank-backed yen stablecoin, launched June 24, 2026 — but it remains confined to the SBI VC Trade platform. The Korean side has no regulated won stablecoin yet; South Korea’s Digital Asset Basic Act, which would authorize won stablecoin issuance, has been stalled in the National Assembly by a dispute between the Bank of Korea and the Financial Services Commission over who should control issuance. The FSC has targeted DABA passage in the second half of 2026 — which, if it happens, would make a commercial launch plausible within 2027.
Is Project Musubi just a Japan-Korea story?
Not at a structural level. The JPY-KRW corridor is the first deployment, but SBI and Nodeinfra have explicitly stated an ambition to expand Project Musubi to additional currencies, jurisdictions, and asset classes. More broadly, if Canton’s atomic payment-versus-payment architecture proves viable for a non-dollar bilateral currency pair at institutional scale, it creates a replicable template for any two-currency corridor currently dependent on dollar intermediation. That is a much larger addressable problem than Japan-Korea bilateral trade alone — the BIS estimates more than $1.4 trillion in daily global FX volume remains fully exposed to settlement risk. Project Musubi is one private-sector attempt to start eliminating it, one corridor at a time.