South Korea plans to pilot tokenized government bonds in 2027. The transactions will be linked to a wholesale central bank digital currency (CBDC) intended for banks and other financial institutions, according to the country's economic strategy for the second half of the year.
The authorities also aim to explore the compatibility of the CBDC infrastructure with other blockchains. Details of the experiment have not yet been disclosed.
Bonds to Be Integrated with Digital Currency
The pilot will continue the development of Project Hangang — a system by the Bank of Korea that integrates wholesale CBDC and tokenized bank deposits within a closed distributed ledger.
In early July, the head of the regulator, Shin Hyun-sung, proposed placing government bonds and digital currency on a single platform. This would allow for simultaneous transfer of securities and payments, as well as automate operations using smart contracts.
The Bank of Korea views the tokenization of government bonds as a way to expedite settlements, simplify the use of securities in repo transactions, and enhance collateral management efficiency. However, the regulator noted potential risks: faster asset movement could accelerate stress among participants, and smart contracts along with external data sources pose additional operational threats.
Project Hangang Tested with Seven Banks
The first phase of Project Hangang took place from April to June 2025, involving seven major banks, with around 80,000 users opening digital wallets out of 100,000 invited.
Participants used tokenized deposits for payments, transfers between individuals, and programmable vouchers. The Bank of Korea published the results of the experiment in December last year.
In March 2026, the regulator announced the second phase of the project. Two more banks joined the testing, with one focus being government payments through CBDC-linked deposit tokens.
Authorities Prepare Rules for Digital Assets
The government also plans to advance the Digital Asset Basic Act. This bill aims to establish common requirements for crypto companies and issuers of stablecoins pegged to the won.
Authorities expect to pass the document in the second half of 2026. However, its review has been delayed due to disagreements between the Bank of Korea and the Financial Services Commission regarding stablecoin issuance regulations.
Additionally, the government intends to create a legal framework for cross-border operations with stablecoins and launch the country's first spot cryptocurrency ETFs. South Korea has already approved the legislative basis for tokenized securities: relevant amendments were adopted in January 2026 and are set to take effect in early 2027.
It is worth noting that South Korea has been testing the infrastructure for a digital won for several years. In May 2023, Samsung and the Bank of Korea prepared to test offline CBDC payments without an internet connection.