The Bank of Korea established a dedicated asset tokenization team under its Digital Currency Office last week, according to an announcement on August 5. The new team, named the Asset Tokenization Unit, was created alongside the second-half regular personnel reshuffle to accelerate efforts in tokenizing assets such as government bonds. In South Korea, central bank digital currency development has progressed through the 'Project Hangang' initiative, which aims to implement an integrated ledger platform capable of hosting central bank money, bank deposits, and tokenized assets.
BOK Defines Tokenization Beyond Digital Currency Representation
According to the Bank of Korea, tokenization goes beyond digitally representing money to include transaction conditions and execution rules. The concept applies not only to currency but also to assets such as government bonds and stocks. The Asset Tokenization Unit will function as the organization leading this tokenization effort for various asset classes.
Project Hangang Advances with Phase 2 Testing Planned
The Bank of Korea has been developing Project Hangang, which implements an integrated ledger as a platform where central bank money (institutional CBDC), bank deposits, and assets can be placed together. The initiative conducted Phase 1 real transactions from April to June last year. Phase 2 testing will begin in the second half of this year with increased participating banks and enhanced convenience features.
BOK Identifies Government Bonds as Primary Tokenization Target
In a blog post published at the end of last month, the Bank of Korea identified government bonds as a representative asset for tokenization. The central bank stated that "if government bonds are issued and circulated within the integrated ledger, the exchange of bond ownership and payment will be processed simultaneously, and collateral management will be automated, which will also help with monetary policy and financial stability, the central bank's inherent responsibilities."
Government Announces 2026 Pilot Program for Bond Tokenization
The government previously announced through its '2026 Second Half Economic Growth Strategy' that it plans to pursue a pilot demonstration project for government bond tokenization linked to institutional CBDC next year. The new Asset Tokenization Unit will lead this initiative. In the BOK organizational structure, a 'unit' (ban) is smaller than a 'team.'
Additionally, several other Bank of Korea departments were renamed in this organizational restructuring. The Economic Research Institute's North Korean Economy Research Office became the Economic Security Office. The Digital Innovation Office's Statistical Data Service Team became the Statistical Platform Team. The Research Department's Fiscal Industry Team became the Fiscal Analysis Team, the Structural Analysis Team became the Industrial Analysis Team, and the Foreign Exchange Management Department's Non-Government Bond Team became the Credit Securitization Bond Team.
FAQ
What did the Bank of Korea establish last week?
The Bank of Korea established a dedicated asset tokenization team called the Asset Tokenization Unit under its Digital Currency Office last week, as announced on August 5. The team was created alongside the second-half regular personnel reshuffle.
Why does the BOK consider government bonds suitable for tokenization?
According to a Bank of Korea blog post from the end of last month, government bonds are a representative asset for tokenization because their issuance and circulation within an integrated ledger would enable simultaneous processing of ownership and payment exchanges, automated collateral management, and support for the central bank's monetary policy and financial stability responsibilities.
