The Bank of Korea is preparing to integrate tokenized government bonds into a unified digital ledger, combining them with wholesale central bank digital currencies and tokenized commercial bank deposits. Governor Rhee Chang-yong presented the plan at a European Central Bank forum in Portugal, expanding on the bank’s ongoing “Project Hangang,” which tests blockchain-based wholesale CBDC systems.
The proposal aims to modernize how government debt is issued, settled, and managed. By embedding financial logic directly into digital assets, the system could streamline verification, improve transaction reversals, and reduce operational errors.
Efficiency gains drive tokenization push
According to the governor, tokenization would make it easier to verify collateral and credit asset providers while simplifying debt issuance. These efficiencies could lower friction in bond markets and improve overall system reliability.
A 2025 report from the Bank for International Settlements supports this view, finding that tokenized bonds can reduce bid-ask spreads without significantly changing issuance costs or yields. The study, which examined both corporate and government bonds, also noted that programmable features could reduce settlement risk and expand access to financial products.
Project Hangang moves to next phase
The first phase of Project Hangang successfully demonstrated the viability of a unified ledger. A second phase is scheduled for late 2026, with a focus on applications such as government subsidy payments. Expanding the system to include government bonds marks a significant step toward digitizing core financial infrastructure.
This effort aligns with broader global initiatives, including the BIS-led Project Agorá, where multiple central banks are exploring how tokenized money and deposits can improve cross-border payments.
Tokenized asset market shows rapid growth
The push comes as tokenized real-world assets gain traction globally. Data from RWA.xyz shows tokenized U.S. Treasury debt accounts for $14.6 billion, or roughly 46% of the $31.7 billion tokenized asset market.
More recent estimates suggest the total tokenized asset market has grown sharply, reaching over $400 billion in 2026. Tokenized funds—especially those linked to U.S. Treasuries—are a major driver, with institutional capital leading adoption.
BlackRock’s tokenized fund, BUIDL, illustrates this trend, amassing more than $25 billion by offering blockchain-based exposure to Treasury yields. The product highlights growing demand for digital financial instruments tied to traditional assets.
Infrastructure and interoperability take center stage
As central banks and financial institutions experiment with tokenization, attention is shifting to the underlying infrastructure. Technologies that enable interoperability between blockchains and existing financial systems are becoming critical.
SWIFT has demonstrated that its network can connect various tokenization platforms, while collaborations with firms like Chainlink are testing secure cross-chain communication. These developments point to a future where multiple systems operate seamlessly within a unified financial ecosystem.
Meanwhile, the Depository Trust & Clearing Corporation is launching a pilot to bring U.S. equities and Treasuries onto blockchain infrastructure, signaling deeper integration of tokenization into core markets.
Risk considerations emerge alongside growth
Despite the momentum, risks remain. Fitch Ratings has noted that tokenization does not inherently change a fund’s credit profile but introduces operational and cybersecurity challenges. The agency also warned that tokenized money market funds may require higher liquidity buffers due to uncertain behavior under market stress.
This growing scrutiny from established financial institutions suggests the sector is maturing, with tighter standards likely to shape its next phase.
A shift toward digital financial architecture
The Bank of Korea’s initiative reflects a broader transition toward blockchain-based financial systems. As governments and institutions build out tokenized infrastructure, the focus is increasingly on efficiency, interoperability, and risk management—factors that will define how quickly these systems move from experimentation to widespread adoption.
Explore how real-world assets move on-chain in 2026—read about tokenized RWA’s next crypto megatrend now.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
