South Korea plans to conduct a pilot program in 2027 linking tokenized government bonds to the central bank’s institutional digital currency (CBDC) digital currency infrastructure, moving the tokenization of sovereign debt from a proposal to an official government schedule.
On Tuesday, the government exposed in its 2026 second-half economic growth strategy, which includes the plan. In addition to setting a pilot date, the strategy said authorities would study how to ensure the Bank of Korea’s (BOK) CBDC infrastructure is interoperable with other blockchains, enabling a potential connection between external distributed ledgers and the bank’s licensed system.
The project examined whether a wholesale CBDC in South Korea, designed for exploit by financial institutions, could support capital markets infrastructure rather than solely serving as a digital payment instrument.
The document does not indicate which bonds will be included, the size of the pilot, the participants, or what blockchain technologies will be used. No details were provided as to whether the project would include the initial issuance of public debt, trading on the secondary market, or only post-transaction settlement.
South Korea expands blockchain and tokenization program
The idea was first publicly outlined on July 1 by BOK Governor Hyun Song Shin during a panel at the European Central Bank Forum on Central Banking. Shin described government bonds as the “big prize” for tokenization and proposed introducing tokenized bonds, central bank bulk money and tokenized commercial bank deposits into the unified register as an extension of the BOK’s Hangang project.
The government strategy envisioned the bond pilot program as part of a broader effort to promote a “blockchain economy.” Authorities plan to introduce measures in the second half of 2026 to support large-scale demonstrations and technology development across the digital asset and blockchain ecosystem.
The BOK found that faster, continuous settlement could more quickly transfer stress and introduce clever contract, liquidity and data oracle risks, as discussed in the report paper at the ECB forum. It also said Project Hangang’s digital ledger and the central bank’s existing payment system do not yet communicate in real time.
Related: South Korea adds token securities to capital market overhaul
In addition to the pilot project, the strategy calls for broader measures to support the country’s blockchain and digital asset industries, including legislation covering businesses and stablecoins.
The bond pilot program is expected to coincide with the introduction of a regulated token securities market in South Korea. The changes recognizing distributed ledgers as valid securities registers are scheduled to enter into force in February 2027. This allows for the regulated issuance and trading of tokenized securities, including shares, bonds and money market products.
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