South Korea will pilot tokenized government bonds in 2027, integrating them with a wholesale CBDC as part of its economic strategy.
South Korea is set to pilot tokenized government bonds in 2027, integrating these transactions with a wholesale central bank digital currency (CBDC) designed for banks and financial institutions. This initiative is part of the country's economic strategy for the latter half of the year.
The pilot program will also examine how the CBDC infrastructure interacts with other blockchain technologies, although specific details about the experiment remain undisclosed.
Integration with Digital Currency
This pilot will build on Project Hangang, a system developed by the Bank of Korea that connects wholesale CBDC with tokenized bank deposits within a closed distributed ledger framework. In July, Bank of Korea Governor Shin Hyun-sung proposed a unified platform for government bonds and digital currency, which would facilitate simultaneous transactions of securities and payments while automating processes through smart contracts.
The Bank of Korea sees the tokenization of government bonds as a means to accelerate settlements, simplify repo transactions, and improve collateral management. However, the regulator has raised concerns about potential risks, including the possibility that quicker asset transfers could increase stress among market participants, and the use of smart contracts could introduce operational vulnerabilities.
Project Hangang's Testing Phases
The first phase of Project Hangang ran from April to June 2025, involving seven major banks and resulting in about 80,000 digital wallets being opened by users out of 100,000 invited. Participants utilized tokenized deposits for various transactions including payments and programmable vouchers. The Bank of Korea released the findings from this phase in December 2025.
The second phase, announced in March 2026, included two additional banks and focused on facilitating government payments via CBDC-linked deposit tokens.
Advancing Digital Asset Regulations
Alongside these initiatives, the South Korean government aims to advance the Digital Asset Basic Act, which seeks to set universal standards for cryptocurrency firms and stablecoin issuers linked to the won. Authorities anticipate the bill will be passed in the latter half of 2026, though its progress has been hindered by disagreements between the Bank of Korea and the Financial Services Commission regarding stablecoin regulations.
Furthermore, the government plans to establish a legal framework for cross-border stablecoin operations and introduce the nation's first spot cryptocurrency exchange-traded funds (ETFs). South Korea has already implemented legislative changes for tokenized securities, with amendments approved in January 2026, set to take effect in early 2027.
South Korea has been exploring digital currency infrastructure for several years, with recent tests including offline CBDC payment trials conducted by Samsung and the Bank of Korea in May 2023.
