Japan-Korea Trade Gets Direct Blockchain Settlement Corridor with Canton Network
Japan's SBI Digital Practice and South Korea's Nodeinfra have partnered to create a direct blockchain settlement corridor between Japan and South Korea using Canton Network. The project, called Project Musubi, 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 and then USD to KRW in two sequential hops.
The current system incurs a $15-$30 handling fee per intermediary bank, plus a foreign exchange markup of 1-3% embedded in the conversion rate. This also leaves both parties exposed to settlement risk, known as Herstatt risk, which can result in one party losing their payment if the counterparty fails mid-sequence.
Canton Network's atomic payment-versus-payment architecture will eliminate this risk by bundling yen and won legs into a single Daml smart contract. The Global Synchronizer (GS) confirms that both parties have validated their respective legs before committing the transaction, ensuring simultaneous finality and no Herstatt window exists.