Bank of Korea Governor Calls Tokenized Government Bonds the “Big Prize” in Finance

Bank of Korea Governor Hyun Song Shin used a panel discussion at the European Central Bank Forum in Sintra, Portugal to lay out a compelling case for government bond tokenization, describing it as far less prone to error than current systems. Shin said tokenized bonds would simplify collateral verification, automate account crediting and allow transactions to be reversed at appropriate times with far greater precision.

Project Hangang Expansion to Link Key Financial Assets

Beyond advocating for tokenization generally, Shin outlined plans to bring together tokenized government bonds, wholesale central bank digital currencies and tokenized commercial bank deposits onto a single unified ledger, building on Project Hangang, the Bank of Korea’s existing blockchain-based wholesale CBDC pilot.

Tokenized Government Bonds Already a Major RWA Category

US Treasury debt currently represents $14.6 billion of the $31.7 billion real-world asset market, making it the largest single tokenized asset category at roughly 46% of total RWA value, according to RWA.xyz data.

A Bank for International Settlements report examining 39 tokenized bonds found evidence of lower bid-ask spreads compared to traditional bonds, alongside comparable issuance costs and yields.