SBI, Daiwa, and Partners Successfully Complete Cross-Border Security Token Trial via Ethereum and USDC
A consortium of leading financial institutions and blockchain firms has successfully completed a joint proof-of-concept (PoC) exploring the cross-border circulation of domestic security tokens (STs).
The collaborative initiative included SBI Securities, Daiwa Securities, Singapore-based SBI Digital Markets and Penguin Securities, and blockchain developer BOOSTRY. The project focused on utilizing the public Ethereum blockchain and the USDC stablecoin exclusively for inter-dealer transactions with overseas brokerages, maintaining a hybrid architecture to bridge domestic compliance with global liquidity.
Hybrid Framework and Regulatory Milestone
Under the tested framework, the primary registry and management for Japanese domestic investors remain safely within ibet for Fin—a private consortium blockchain platform developed and managed by BOOSTRY. However, for international inter-dealer transactions, the target security tokens are mirrored onto the public Ethereum network. This architecture successfully demonstrated the capability to execute Delivery-versus-Payment (DvP) settlements using USDC, mitigating counterparty risk while preserving the legal stability of domestic rights.
Furthermore, the participants confirmed that they have successfully navigated crucial practical and regulatory hurdles. The consortium compiled extensive research into network gas fees, private key management, Business Continuity Planning (BCP), and cross-border operational splits between Japanese and Singaporean institutions.
Following a comprehensive security and risk assessment filed by SBI Securities and Daiwa Securities, the relevant domestic self-regulatory organization reviewed the report and notified the firms that it requires no further confirmations regarding the use of Ethereum for this project at this stage.
Unlocking Global Capital for Diverse Japanese Assets
The underlying strategy of the initiative aims to transition the current Japanese security token market away from its domestic-only silo—which relies heavily on Free-of-Payment (FOP) settlement—and toward a globally interconnected ecosystem.
By building a viable cross-border settlement infrastructure, the project intends to achieve several strategic milestones:
- For Issuers: Expanding funding avenues by marketing unique, attractive Japanese assets—ranging from traditional corporate bonds and real estate to cultural exports like anime, content, and specialty sake—directly to overseas markets.
- For Brokerages: Expanding client bases and driving revenue growth through structured international collaborations.
- For Global & Domestic Investors: Facilitating deeper portfolio diversification by providing seamless, mutual access to distinct domestic and foreign asset classes.
Next Steps and Market Development
While the initial trial validated the technical feasibility and systemic interoperability of public networks in institutional finance, the consortium emphasized that further development is required. Moving forward, the companies plan to evaluate corporate bond ST regulations and expand testing into other asset classes, such as real estate. Ongoing industry discussions will focus on refining statutory record-keeping, perfecting stablecoin settlement workflows, and establishing standardized operational frameworks among international market participants.
Norbert Gehrke
