SBI Holdings announced on the 13th that it has signed memoranda of understanding (MOUs) with the National Bank of Cambodia (NBC) to conduct proofs of concept (PoCs) for two initiatives: tokenizing Cambodian government bonds using blockchain, and using the yen-denominated stablecoin JPYSC for international remittances between Japan and Cambodia. The efforts represent an attempt to move existing financial infrastructure on-chain across both assets and funds.
The bond tokenization PoC will adopt Canton Network, a blockchain designed for financial institutions. In addition to verifying the technical feasibility of tokenized government bonds, SBI plans to examine the efficiency, security, and transparency of the transaction process. The NBC will handle the registration and management of holder information associated with bond transfers, while SBI will advance everything from system development to the PoC itself in an integrated manner through group companies including local subsidiary SBI Bank (Cambodia) Plc. and SBI Digital Practices.
The goal is to build, on a blockchain, an environment in which citizens can hold government bonds in small denominations through financial institutions close at hand. Cambodian government bonds are currently held and traded mainly by banks. SBI says tokenization will make it possible to purchase bonds in small units and will also automate the management of holder records and the administrative work of interest payments and redemptions.
The other PoC integrates JPYSC into international remittances connecting Japan and Cambodia. Transfers between the two countries often pass through multiple intermediary (correspondent) banks, leaving challenges in terms of time and cost. In Cambodia, the blockchain-based payment system Bakong is widespread, and expectations for more efficient remittance infrastructure are rising against the backdrop of remittances home by Cambodians living in Japan and growing payment needs among Japanese companies operating in Cambodia.
The PoC will be conducted in a closed-loop environment with limited participants, running the full process from initiation to receipt of remittances, and will explore the feasibility of practical deployment from three perspectives: regulation, systems, and business viability. The NBC will provide regulatory guidance on the legal and licensing framework and will observe and review the trials. On the SBI side, SBI Bank (Cambodia), SBI VC Trade, SBI Remit, SBI Digital Trust, and others will participate, establishing a structure in which banking, JPYSC handling, remittances, and blockchain infrastructure functions are all completed within the group.
Note: Compiled based on SBI Holdings' announcement
A key feature is that JPYSC will not be handled directly by remittance users but will be used as a settlement layer between financial institutions. Even after practical deployment, the user's remittance experience will remain unchanged, according to the plan, which envisions embedding blockchain and stablecoins behind the scenes in financial infrastructure invisible to users. SBI Bank (Cambodia), as a member bank of Bakong, will serve as the settlement bank on the Cambodian side. The framework is positioned not as a replacement for Bakong but as a complement to it, and is also intended to promote use of the local currency, the riel.
The two PoCs are currently separate initiatives, and no mechanism for purchasing government bonds with JPYSC or for simultaneous delivery-versus-payment (DvP) of tokenized bonds and JPYSC has been announced. Nor has a plan been disclosed to technically connect Canton, which handles the bonds, with Bakong, which underpins Cambodia's domestic payments. Specific service details and timing will be decided through future discussions.
Interim results from both PoCs are scheduled to be presented at the Black Swan Summit, an event to be held in Phnom Penh, Cambodia, on the 15th and 16th, where demonstrations and panel discussions on both bond tokenization and JPYSC-based international remittances will also take place.
Among bond tokenization efforts using the same Canton Network, the Japanese government bond tokenization concept announced by Progmat and Digital Asset on November 10 centers on institutional investors' repo transactions and collateral management, whereas the Cambodian PoC differs in character by focusing on expanding individual investment opportunities and financial inclusion. For SBI, with the profitability of its crypto asset business lackluster, the project will be a test case for commercializing on-chain finance built around stablecoins and tokenized assets. Japanese financial groups are also exploring the use of yen-denominated stablecoins for cross-border payments, and the progress of the PoC—including the involvement of regulators—could influence future regulatory design and the strategies of other companies.
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