Pilot with Japan's SBI Group verifies full cycle of institutional fund transfer, exchange and settlement

First in Korean insurance industry — potential to cut processing time and conversion costs confirmed

Regulatory groundwork, including digital asset framework law, must come before real transactions

An exterior view of Kyobo Life's headquarters. [Kyobo Life]
An exterior view of Kyobo Life's headquarters. [Kyobo Life]

Kyobo Life and Japan's SBI Group have verified a structure for transferring institutional funds directly between yen and won, bypassing the US dollar entirely. It marks the first time a Korean insurance company has tested the full cycle of cross-border institutional fund transfer, currency conversion and settlement using digital tokens.

Kyobo Life said Thursday it has wrapped up a "Korea-Japan stablecoin-based cross-border proof-of-concept project" that it has been running with SBI Group since July.

The pilot was conducted jointly with SBI Digital Practice, a unit of SBI Group, using test tokens — not actual currency — in a test environment on Canton Network, a blockchain platform designed to securely connect and process transactions between financial institutions.

The core of the structure is a direct yen-to-won institutional fund transfer that does not route through the dollar. Under the conventional approach, converting yen to won requires an intermediate step through the dollar, adding multiple conversion and settlement stages that increase processing time, raise costs and introduce exchange-rate risk.

The pilot applied a method of converting yen-denominated stablecoins directly into won-denominated stablecoins, verifying with test tokens that funds can move between the two currencies without touching the dollar.

Through the exercise, the two companies confirmed the potential to shorten processing times for blockchain-based cross-border fund transfers, cut costs by simplifying intermediate conversion steps, and track transaction information in real time. They also validated an operational model for safely handling in Korea the digital assets transferred from abroad and their associated settlement payments.

Kyobo Life said it believes the structure tested in the pilot could, once the relevant regulations and financial infrastructure are in place, serve as a foundation for improving the efficiency of overseas financial transactions and strengthening the transparency of fund flows.

Building on the pilot results, the two companies plan to explore further cooperation in Web3 finance — including digital asset exchange and asset management linkages between Korea and Japan, and the development of new business models grounded in actual transaction structures.

"Through this pilot, we confirmed the technical feasibility and efficiency of using stablecoins and blockchain for cross-border institutional fund transfers," a Kyobo Life official said. "We will continue to expand our cooperation with SBI Group and respond proactively to changes in Web3 financial infrastructure."

Real-world application, however, hinges on regulatory groundwork. The Digital Asset Basic Act — which would establish the legal basis for issuing and distributing won-denominated stablecoins — has been stalled in the National Assembly for more than a year amid disagreements over who should be permitted to issue them. The ruling party plans to hold a public hearing later this month, and the Financial Services Commission is targeting passage of the legislation before the end of the year.


won@heraldcorp.com