Asia's largest financial institutions are building stablecoin payment corridors that bypass the U.S. dollar entirely. On October 20, South Korea's Shinhan Card signed a formal agreement with SBI VC Trade and SBI XDC Network APAC in Tokyo to test yen-denominated stablecoin payments for travelers b...
"In this era of tokenization, the importance of global infrastructure for digital assets is greater than ever." — Yoshitaka Kitao, CEO, SBI Holdings
Asia's largest financial institutions are building stablecoin payment corridors that bypass the U.S. dollar entirely. On October 20, South Korea's Shinhan Card signed a formal agreement with SBI VC Trade and SBI XDC Network APAC in Tokyo to test yen-denominated stablecoin payments for travelers between Japan and South Korea — a corridor that processed 10.1 million cross-border arrivals in the first eight months of 2026.
The Shinhan-SBI deal is the second Japan-Korea stablecoin initiative in five weeks, following a September 17 proof-of-concept between Kyobo Life Insurance and SBI that settled simulated won-yen conversions on the Canton Network without routing through dollar intermediaries. These bilateral efforts sit within a broader regional infrastructure buildout: Japan's three megabanks completed a joint yen stablecoin pilot in July, the Monetary Authority of Singapore's Project BLOOM now includes Visa and Ripple, and SBI Holdings has invested $270 million in Indonesian brokerage Ajaib to push yen stablecoin rails into Southeast Asia.
The pattern is clear: Asian banks are not waiting for Western stablecoin regulation to settle. They are building local-currency stablecoin corridors designed to reduce dependence on SWIFT and the dollar-denominated correspondent banking system.
Shinhan Card President Park Chang-hoon, SBI VC Trade President Tomohiko Kondo, and SBI XDC Network APAC COO Tadashi Yoshida signed the agreement at SBI Group headquarters in Tokyo on October 20. Shinhan Card disclosed the partnership on October 21.
The scope covers four areas:
A Shinhan Card representative stated: "This is the first step toward creating a new payment paradigm that connects digital assets and traditional finance. We will strengthen the technological foundation for Web 3.0 payments and settlement, including stablecoins, and enhance our competitiveness in the global digital payments market."
No launch date was announced. The specific yen stablecoin to be used and participating merchants have not been disclosed. Implementation depends on meeting regulatory requirements in both jurisdictions.
On September 17, Kyobo Life Insurance and SBI Group announced completion of a proof-of-concept that tested direct exchange between yen- and won-denominated stablecoin representations on the Canton Network test environment.
Key parameters of the pilot:
The critical feature: the pilot tested a direct won-yen conversion without routing through the U.S. dollar. In traditional correspondent banking, a payment from Seoul to Tokyo typically clears through a dollar-denominated nostro account, adding a second foreign exchange leg and associated costs.
Japan's stablecoin infrastructure is developing along three parallel tracks:
Track 1: The Megabank Consortium (Project Pax) MUFG, SMBC, and Mizuho completed a joint yen stablecoin pilot from July 17-23, 2026. The test settled cross-border payments between Mitsubishi Corporation's Tokyo headquarters and its overseas offices. The consortium targets one trillion yen (~$6.5 billion) in B2B stablecoin volume by 2028 and plans commercial deployment within Japan's fiscal year 2026 (ending March 2027). Infrastructure is built on Progmat, a Tokyo-based platform supporting Ethereum, Polygon, Avalanche, and Cosmos.
Track 2: SBI-Startale SBI Holdings and blockchain firm Startale announced plans for a regulated yen stablecoin in Q2 2026. This token is designed for cross-border settlement, tokenized equities, and real-world asset flows. SBI's $270 million investment in Indonesia's Ajaib Group signals intent to push the coin beyond Japan into Southeast Asian corridors.
Track 3: Regulatory Framework Japan's Financial Services Agency established a dedicated Crypto Assets and Stablecoins Division on August 7, 2026. Under the Payment Services Act, stablecoin issuance is restricted to banks, trust companies, and licensed fund transfer providers. The FSA lifted the one-million-yen (~$6,700) transaction ceiling for certain providers, opening institutional-scale volumes. Draft rules require foreign-bond collateral backing stablecoins to carry top-tier credit ratings from issuers with at least ¥100 trillion in outstanding debt.
The Monetary Authority of Singapore's Project BLOOM — Borderless, Liquid, Open, Online, Multi-currency — provides a multilateral framework that sits above these bilateral corridors.
Phase 1 (Live): Thailand-Singapore corridor. KASIKORNBANK, Orbix Technology, and StraitsX enable real-time QR code payments for Thai travelers at Singapore merchants.
Phase 2 (In Progress): Expansion to Indonesia, Japan, Taiwan, and Hong Kong, with a Q2 2026 target for initial go-live.
Key participants added in 2026:
StraitsX is also extending its payment network to provide real-time, FX-transparent cross-border settlement across Asia, beginning with enhanced connectivity between Singapore, Thailand, Taiwan, and Japan.
The Japan-Korea corridor is one of Asia's highest-volume bilateral travel routes: 10.1 million cross-border arrivals in January-August 2026, with 7.42 million traveling from South Korea to Japan and 2.7 million in the reverse direction.
Current cross-border payment costs on traditional rails:
| Channel | Average Cost (% of principal) | |---------|-------------------------------| | Bank/SWIFT transfers (small) | ~14.99% on $200 transfers | | Global average (all channels) | 6.36% | | APAC average | 6.5% | | South Asia average | 4.80% | | SWIFT intermediary fees | $15-$40 per hop, 1-3 hops |
Sources: World Bank Remittance Prices Worldwide (Q3 2025); FSB Annual Progress Report on Cross-border Payments (October 2024).
The stablecoin value proposition is straightforward: eliminate the intermediary hops. A yen stablecoin payment at a Seoul merchant would require one on-chain transaction and one FX conversion rather than two FX legs (yen-to-dollar, dollar-to-won) and multiple correspondent bank intermediaries.
Whether this cost advantage survives regulatory compliance costs, AML/KYC overhead, and network fees remains to be tested. The Shinhan-SBI and Kyobo-SBI pilots are designed to answer exactly that question.
The cross-border stablecoin corridor depends on aligned regulatory frameworks in both countries.
Japan:
South Korea:
The regulatory gap: Japan has finalized operational rules, while South Korea's stablecoin-specific framework remains in draft. The Shinhan-SBI pilot must navigate this asymmetry.
The Shinhan-SBI agreement extends a pattern that began with MAS Project BLOOM and has now reached Asia's largest bilateral travel corridor. Asian financial institutions are not simply experimenting with stablecoins as yield instruments or speculative assets. They are engineering payment infrastructure designed to reduce structural dependencies on dollar-denominated clearing.
The economic logic is straightforward: eliminate intermediary hops in cross-border settlement. Whether the cost savings survive regulatory compliance overhead and network economics is the open question these pilots are designed to answer. The megabank consortium's ¥1 trillion target by 2028 provides a concrete benchmark against which progress can be measured.
For now, the data shows institutional intent, not institutional adoption. The pilots are running on test networks with simulated tokens. The next phase — live money, real merchants, actual regulatory approval — will determine whether Asia's local-currency stablecoin corridors produce measurable economic value or remain proof-of-concept exercises.