> ## Documentation Index
> Fetch the complete documentation index at: https://musubinetwork.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Custody & Trust Model

> How custody, authorization, and trust work between you, your custodian, and Musubi.

Musubi uses the same custody model you already know: your assets are held by your custodian, and movements require explicit authorization. The difference is that authorization and settlement are enforced cryptographically rather than by manual process.

## Your Custodian's Role

Your custodian (your chosen institutional custody provider) holds your stablecoins and authorizes asset movements on your behalf. This is the same relationship you have with any institutional custody provider:

* **Asset safekeeping**: Your JPYSC0 balance is held by your custodian, not by Musubi
* **Movement authorization**: Your custodian must co-sign before any assets leave your account
* **Whitelisting**: Your custodian whitelists the Musubi settlement address, just as they would whitelist withdrawal destinations today

<Info>
  Musubi never holds your assets. It coordinates settlement between custodians — like CLS Bank coordinates settlement between commercial banks.
</Info>

## Dual Authorization

Every trade requires authorization from **two parties**: you and your custodian. Neither can act alone.

| Action                   | Who                   | TradFi Parallel                  |
| ------------------------ | --------------------- | -------------------------------- |
| Select a quote           | You (the institution) | Treasury initiates payment       |
| Authorize asset movement | Your custodian        | Operations confirms and releases |

This maps directly to the maker-checker / four-eyes principle used in institutional operations. The difference: on Musubi, this is enforced by the settlement protocol, not by internal procedure. Your custodian's authorization is a cryptographic co-signature — it cannot be bypassed.

## How Settlement Authorization Works

Before any assets move, **four parties** must authorize the settlement:

```mermaid actions=false theme={null}
graph TD
  A[Core Coordinator<br/>validates the trade] --> S[Settlement]
  B[Sender Custodian<br/>authorizes JPYSC0 release] --> S
  C[Market Maker<br/>commits USDCx liquidity] --> S
  D[Receiver Custodian<br/>confirms receipt capability] --> S
```

All four signatures are collected before execution. The atomic settlement only proceeds when all parties have signed. If any party refuses or fails to respond, settlement does not proceed and no assets move.

<Note>
  This is more conservative than most tradfi settlement systems. CLS Bank requires the two commercial banks to pre-fund; Musubi requires all four participants — including both custodians — to explicitly authorize.
</Note>

## Musubi's Role

Musubi is the **coordinator**, not a counterparty:

| What Musubi does                               | What Musubi does NOT do                     |
| ---------------------------------------------- | ------------------------------------------- |
| Validates order structure and party signatures | Hold or custody any assets                  |
| Broadcasts anonymized RFQs to market makers    | Set or influence FX rates                   |
| Coordinates the 4-party settlement signing     | Move assets without custodian authorization |
| Executes the atomic DvP transaction            | Access your internal systems or data        |
| Provides settlement confirmations              | Act as counterparty to any trade            |

## Working with Your Custodian

### Before Your First Trade

You and your custodian need to complete these steps together:

1. **Custodian onboarding**: Your custodian connects their node to the settlement network and receives their Party ID
2. **Account setup**: Your custodian sets up your institutional custody account (same as their existing process)
3. **Whitelist configuration**: Your custodian whitelists the Musubi settlement address for withdrawals from your account
4. **Stablecoin deposit**: You deposit JPYSC0 into your custodian account (via their existing deposit process)

### During Normal Operations

* Your custodian sees all orders involving assets they custody
* When you accept a quote, your custodian automatically receives the co-signature request
* Settlement confirmations are visible to both you and your custodian independently
* Your custodian can monitor all activity through their own dashboard

### Communication

Your custodian operates independently on the network. You do not need to coordinate with them per-transaction — the settlement protocol handles the authorization flow. However, you should establish:

* **Operational contacts** for escalation if settlement issues arise
* **Liquidity monitoring** — ensure sufficient JPYSC0 balance before initiating trades
* **Reporting alignment** — agree on reconciliation format and frequency