SKN | Bank of Korea Governor Backs Tokenized Government Bonds and Unified Digital Ledger

Key Points

• Bank of Korea Governor Hyun Song Shin said tokenized government bonds could simplify debt issuance, settlement and collateral management.

• The central bank plans to integrate tokenized government bonds, wholesale central bank digital currencies (CBDCs) and tokenized bank deposits on a unified ledger.

• The initiative would expand the Bank of Korea’s blockchain-based wholesale CBDC pilot known as Project Hangang.

• The Bank for International Settlements (BIS) says tokenized government bonds could improve market efficiency and support financial innovation.

Bank of Korea Promotes Tokenized Government Bonds

The Governor of the Bank of Korea has outlined an ambitious vision for the future of financial markets, highlighting tokenized government bonds as a key innovation capable of modernizing sovereign debt issuance and settlement.

Speaking during a panel discussion at the European Central Bank (ECB) Forum on Central Banking in Sintra, Portugal, Governor Hyun Song Shin said tokenization has the potential to simplify the management of government securities while reducing operational complexity across financial markets.

According to Shin, digitizing government bonds on blockchain-based infrastructure would make collateral verification, settlement and transaction reversals more efficient while reducing the risk of operational errors.

Unified Ledger Planned for Digital Assets

Beyond tokenized government bonds, Shin revealed that the Bank of Korea is exploring a unified ledger capable of supporting multiple forms of digital financial assets.

The proposed platform would combine tokenized government securities, wholesale central bank digital currencies (CBDCs) and tokenized commercial bank deposits within a single blockchain-based infrastructure.

The initiative would build upon Project Hangang, the Bank of Korea’s wholesale CBDC pilot program designed to evaluate how distributed ledger technology can improve financial market infrastructure and institutional settlements.

A unified ledger could enable seamless settlement between different asset classes while reducing reconciliation requirements and improving transaction efficiency.

Tokenization Continues to Expand

Tokenized government debt has become one of the fastest-growing segments within the digital asset industry.

According to data from RWA.xyz, tokenized U.S. Treasury securities currently represent approximately $14.6 billion, accounting for nearly 46% of the global tokenized real-world asset (RWA) market, which has grown to roughly $31.7 billion.

The rapid expansion reflects growing institutional interest in applying blockchain technology to traditional financial instruments, particularly highly liquid government securities.

BIS Highlights Benefits of Tokenized Bonds

Support for tokenized government debt extends beyond central banks.

A 2025 report published by the Bank for International Settlements (BIS) concluded that tokenization has the potential to improve financial market efficiency while supporting new forms of financial innovation.

The BIS noted that government securities serve as essential collateral throughout the financial system and act as important investment vehicles for both institutional and retail investors.

According to the report, tokenization enables programmable transactions that can automate settlement processes, reduce counterparty risk, broaden investor access and facilitate the development of new financial products.

Evidence Suggests Improved Market Efficiency

The BIS study evaluated 39 tokenized bond issuances, including 24 corporate bonds and 15 sovereign government bonds.

Compared with traditional bond issuance, researchers found evidence suggesting that tokenized bonds may benefit from narrower bid-ask spreads while maintaining issuance costs and yields comparable to conventional securities.

Although the market remains in its early stages, the findings suggest blockchain-based issuance can improve market efficiency without materially increasing financing costs.

Growing Institutional Momentum

The Bank of Korea’s plans reflect a broader global trend as central banks, financial institutions and governments increasingly explore blockchain technology for wholesale financial infrastructure rather than consumer-facing cryptocurrency applications.

Projects involving tokenized government securities, wholesale CBDCs and tokenized deposits are becoming central components of efforts to modernize payment systems, securities settlement and cross-border financial transactions.

As institutional adoption accelerates, tokenization is increasingly viewed as a practical tool for improving the efficiency and resilience of traditional capital markets.

Outlook

The Bank of Korea’s vision for combining tokenized government bonds, wholesale CBDCs and tokenized bank deposits on a unified ledger underscores the growing convergence between blockchain technology and traditional finance. As central banks continue experimenting with digital financial infrastructure, tokenized sovereign debt could play an increasingly important role in the modernization of global capital markets.