Bank of Korea backs tokenised government bonds

• Bank of Korea Governor Hyun Song Shin said tokenised government bonds could simplify debt issuance, collateral management and settlement.
• The central bank plans to combine tokenised government bonds, wholesale central bank digital currencies and tokenised bank deposits on a unified ledger.
• The proposal builds on Project Hangang as central banks explore blockchain infrastructure for financial markets.

Bank of Korea Governor Hyun Song Shin said tokenised government bonds could improve the issuance, management and settlement of government debt during a panel discussion at the European Central Bank Forum on Central Banking.

Shin said the Bank of Korea plans to integrate tokenised government bonds, wholesale central bank digital currencies and tokenised commercial bank deposits on a unified ledger as part of an expansion of its Project Hangang pilot.

“The big prize is tokenising government bonds,” said Bank of Korea Governor Hyun Song Shin.

Shin said tokenisation could simplify collateral verification, asset transfers and transaction reversals by placing financial assets on the same blockchain-based infrastructure.

The comments come as tokenised US Treasury products have grown to about US$14.6 billion, representing roughly 46% of the US$31.7 billion tokenised real-world asset market, according to RWA.xyz.

A July 2025 report from the Bank for International Settlements said tokenised government bonds could improve market efficiency, reduce settlement risk and support financial innovation if regulatory and infrastructure challenges are addressed.

The BIS reviewed 39 tokenised bond issuances and found evidence of lower bid-ask spreads with issuance costs and yields broadly comparable to traditional government and corporate bonds.