SBI, Kyobo finish Japan–Korea stablecoin trial without dollar

SBI Holdings and Kyobo Life completed a pilot that settled payments between Japan and South Korea using stablecoins representing yen and won. The pilot ran recently and aimed to avoid the usual conversion through U.S. dollars.

The pilot used a distributed ledger to tokenize currency equivalents, enabling counterparties to record and settle transfers directly on-chain. Tests covered end-to-end sending and receiving of funds, checks for settlement finality and reconciliation between on-chain records and each firm’s off-chain ledgers.

Participants examined liquidity management, the mechanics of tokenizing fiat equivalents and how to integrate the stablecoin infrastructure with existing banking and accounting systems. Identity verification and anti-money-laundering controls were applied to meet compliance requirements.

Removing the dollar intermediary reduced the number of currency conversions and correspondent banking links typically involved in transfers between non-dollar currencies. The firms reported the arrangement simplified the payment flow and shortened the chain of correspondent relationships.

No commercial roll-out plans or regulatory approvals were announced. Legal and regulatory rules for tokenized fiat and stablecoins differ between Japan and South Korea, and wider use would require coordination with financial authorities in both countries.

Cross-border payments commonly use the U.S. dollar as a bridge currency because of its liquidity and extensive correspondent networks. Market participants and regulators have been testing alternatives, including central bank digital currencies and private stablecoins, to seek faster settlements and lower costs.