Every FX order on Musubi is a complete, immutable regulatory record. From the moment an institution submits a payment intent through atomic settlement, every event is timestamped and linked to a single cryptographic settlement proof.
The FX Order as Audit Record
Each order captures the full lifecycle with immutable timestamps:
| Event | Field | What It Proves |
|---|
| Order initiated | created_at | When the sender authorized the payment intent |
| Order expiry deadline | expires_at | Maximum window for the trade |
| Quote submitted | quote_submitted_at | When the market maker offered a rate |
| Quote accepted | quote_accepted_at | When the institution + custodian authorized the trade |
| Quote validity | quote_valid_until | How long the offered rate was valid |
| Settlement completed | settled_at | When the atomic DvP finalized |
Compliance Fields
| Field | Purpose | Regulatory Relevance |
|---|
sender_party_id | Sender identity | Originator identification (FATF Recommendation 16) |
receiver_party_id | Receiver identity | Beneficiary identification (FATF Recommendation 16) |
sender_custodian_party_id | Sender’s custodian | Custodian identification, authorization chain |
receiver_custodian_party_id | Receiver’s custodian | Custodian identification, delivery confirmation |
market_maker_party_id | Liquidity provider | Counterparty identification |
jurisdiction_sender | Sender jurisdiction (ISO 3166) | FSA reporting scope (Japan) |
jurisdiction_receiver | Receiver jurisdiction (ISO 3166) | FSC reporting scope (Korea) |
kyc_aml_ref | KYC/AML clearance UUID | Links to external KYC verification record |
intent_signature | Sender’s cryptographic signature | Proves sender authorization (verifiable off-chain) |
fx_rate | Executed exchange rate | Best execution documentation |
target_amount / source_amount_actual | Trade amounts | Transaction value for threshold reporting |
transaction_hash | Settlement proof | Atomic execution evidence — single hash covering all 4 DvP legs |
Transaction Proof
Every settled trade produces a single transaction_hash — a cryptographic proof covering all four legs of the atomic DvP settlement.
This hash:
- Proves that both currency legs settled simultaneously (no partial settlement)
- Covers the complete transaction: sender’s release, market maker’s delivery, receiver’s receipt, market maker’s payment
- Is independently verifiable by any party to the trade
- Serves as the definitive settlement reference for reconciliation and regulatory reporting
TradFi comparison: In correspondent banking, you receive separate SWIFT confirmations at each hop. On Musubi, one hash proves the entire end-to-end settlement.
Dual-Jurisdiction Reporting
Musubi operates across two regulatory jurisdictions:
| Jurisdiction | Regulator | Key Requirements | Threshold |
|---|
| Japan | Financial Services Agency (FSA) | PSLMA compliance, JAFIC notification | JPY 2,000,000 |
| South Korea | Financial Services Commission (FSC) | VASP Act compliance, KoFIU reporting | KRW 10,000,000 |
| International | FATF | Travel Rule (Recommendation 16) | USD 1,000 |
jurisdiction_sender and jurisdiction_receiver fields on every order enable routing to the correct reporting regime. Both Japanese and Korean regulators receive the full FX order record for their respective requirements.
Off-Chain Signature Verification
The intent_signature field enables regulators to verify sender authorization without accessing the settlement network:
- Regulator receives the FX order record (via your compliance system)
- Regulator verifies
intent_signature against the sender institution’s public key
- Verification proves the sender authorized the exact order details (amount, currency, receiver)
This is analogous to verifying an authorized signatory on a payment instruction — but cryptographically enforceable and tamper-evident.
Record Retention
Settlement records should be retained according to jurisdictional requirements:
| Jurisdiction | Minimum Retention | Regulation |
|---|
| Japan | 5 years | PSLMA Article 63-14 |
| South Korea | 10 years | VASP Act |
transaction_hash and settled order data provide the complete record needed for regulatory examination. Regulatory requests should be serviced within 72 hours per standard compliance SLAs.
Planned Enhancements
The following capabilities are on the roadmap for production readiness:
| Enhancement | Regulatory Driver | Status |
|---|
| Travel Rule fields (originator/beneficiary name, account, address) | FATF R.16, Japan PSLMA Art. 62-4, Korea VASP Act Art. 7 | Planned |
| Sanctions screening gate before settlement | Japan FEFTA, Korea Foreign Transactions Act | Planned |
| AML transaction monitoring with threshold alerts | Japan PSLMA Art. 62-3, Korea KoFIU reporting | Planned |
| Fee decomposition (spread, commission, mid-market rate) | Japan FSA fee disclosure, Korea FSC transparency | Planned |
| Record retention enforcement at database level | Japan PSLMA Art. 63-14, Korea VASP Act | Planned |
| Audit trail hash integrity (SHA-256 chain) | Tamper detection for regulatory examination | Planned |
These enhancements are required before production licensing. Musubi is currently deployed on testnet for POC validation. Contact your Musubi integration manager for the production compliance timeline.
