Kyobo Life, SBI Test Won-Yen Stablecoin Transfers Bypassing Dollar

Kyobo Life Insurance has verified a structure for moving institutional funds between South Korea and Japan using stablecoins, without routing the money through the U.S. dollar, in a joint test with Japan's SBI Group. It is the first time a Korean insurer has run a proof-of-concept covering the entire process of transferring, converting and settling institutional funds.

Kyobo Life said on the 17th that it had completed the Korea-Japan stablecoin-based cross-border proof-of-concept project, which began in July.

The test was conducted jointly with SBI Digital Practice, a unit of SBI Group. Using the test environment of Canton Network, a blockchain designed for financial institutions, the two companies verified a structure that converts a yen-denominated stablecoin directly into a won-denominated stablecoin, using test tokens.

Previously, when the dollar was used as an intermediary currency to convert yen into won, multiple conversion steps were required, adding time and cost and exposing the transaction to exchange-rate risk. Through the test, the two companies confirmed a fund transfer structure that bypasses the dollar, along with the potential for shorter processing times and lower costs from simplifying intermediary conversion steps.

The companies also reviewed an operating model that uses blockchain to verify and track transaction data in real time and to handle digital assets transferred from overseas, along with the related settlement funds, within Korea. Kyobo Life expects the model can be used to improve the efficiency of cross-border financial transactions and the transparency of fund flows once the relevant rules and financial infrastructure are in place.

Building on the test, Kyobo Life and SBI Group plan to expand cooperation in Web3 finance, including digital asset conversion between Korea and Japan, links to asset management and new business models based on actual transaction structures.

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