Status: this page is undergoing external legal review. Content is subject to change — in particular as the Korean Digital Asset Basic Act (디지털자산기본법) moves through the National Assembly, several of the SFIA-era rules cited here will be superseded or augmented.
What each role needs
| Role | JP | KR |
|---|---|---|
| Custodian | EPI provider | FSC / KoFIU VASP registration |
| Market Maker | EPI provider | FSC / KoFIU VASP registration |
| Institution | — | — |
| Network Operator (Musubi) | — | — |
- Each role is licensed in its own jurisdiction only. A JP custodian holds JP licences; a KR custodian holds KR licences. The network spans both by having one custodian on each side.
- Custodians: sender-side and receiver-side are separately licensed entities. Musubi’s cross-border flow requires at least one JP custodian and one KR custodian.
- JP: only EPI provider registration is strictly required for Musubi. Japan’s 2023 PSA revisions split stablecoins (JPYSC0, USDCx) out of the crypto-asset category — they are “Electronic Payment Instruments,” not “crypto-assets.” Musubi’s asset set is entirely EPI. A JP custodian that also handles non-stablecoin crypto (BTC, ETH) for the same clients will additionally need CAES registration for that separate business activity, but that is outside Musubi’s scope.
- Market makers: either/or, not both. An MM needs the licence for its own domicile — JP EPI provider or KR VASP, not both. Payment direction (JP→KR or KR→JP) does not change the MM’s required licence — the activity is EPI exchange regardless of flow direction.
- Offshore market makers (SG, LU, BVI, etc.) may operate under JP’s foreign-EPI-provider framework (外国電子決済手段等取引業者) or under KR counterparty-exempt provisions, since counterparties are licensed custodians, not retail.
- Institution holds no Musubi-layer licence. It is the custodian’s corporate customer; KYC + reporting obligations sit with the custodian.
- Network operator (Musubi) holds no licence. It is a technology / infrastructure provider following the Datachain-for-Progmat precedent. See Why the network operator is not licensed.
Abbreviations used on this page. Neither Japanese licence has a JFSA-published English abbreviation. Short forms:
- EPI provider → Electronic Payment Instruments Exchange Service Provider (電子決済手段等取引業者) — PSA Art. 62-3; covers stablecoins
- CAES registration → Crypto-Asset Exchange Service Provider (暗号資産交換業者) — PSA Art. 37 / 41; covers non-stablecoin crypto-assets (BTC, ETH, etc.) — not required for Musubi-scoped activity
Why the network operator is not licensed
Musubi-the-operator provides the DAR, Canton domain coordination, PQS indexing, and the web UI. It does not custody tokens, set prices, or authorize transfers as principal. Under JFSA 2023 guidance and the Datachain-for-Progmat precedent, a party providing the technical platform but not holding tokens, setting rates, or acting as principal is a technology vendor, not an EPI provider. The Canton co-signature onDvPSettlement is a cryptographic protocol requirement, not an exercise of legal authority over the EPI. Legal classification is determined by economic substance — who holds tokens, who bears settlement risk — not by the Canton signatory set.
What licences are NOT needed for anyone on Musubi
| Licence | Needed? | Why |
|---|---|---|
| JP Authorized Foreign Exchange Bank | No | Fiat FX reporting is the institution’s bank’s responsibility, outside the Musubi DvP |
| KR Designated Foreign Exchange Bank | No | Same reasoning |
| JP Bank / funds-transfer licence | No | Musubi doesn’t move fiat currency |
| KR Bank licence | No | Same |
| JP Type 1 Financial Instruments Business | No | JPYSC0 / USDCx are not securities |
| KR Digital Asset Basic Act licence | TBD | Not yet enacted |
Minimum viable network composition
- ≥ 1 JP-licensed custodian holding both JP licences above
- ≥ 1 KR-licensed custodian holding KR VASP registration
- ≥ 1 market maker licensed in at least one of the two jurisdictions
- Musubi operator — unlicensed infrastructure provider
- Institutions (participants) — no Musubi-layer licence; each brings its own designated FX bank for fiat on/off-ramp