Hyun Track Shin, the governor of the Bank of Korea, praised tokenization for its means to simplify the issuance and administration of authorities bonds.
Shin mentioned throughout a Wednesday panel dialogue on the European Central Bank (ECB) Discussion board on Central Banking in Sintra, Portugal, that tokenized bonds would make it simpler to confirm collateral, credit score the asset supplier’s account and reverse transactions on the acceptable time.
“The massive prize is tokenizing authorities bonds,” Shin mentioned, including that it’s “a lot simpler, a lot much less liable to errors when you have every thing tokenized.”
US Treasury debt is the most important tokenized real-world asset class, representing $14.6 billion, or about 46% of the $31.7 billion RWA market, based on knowledge supplier RWA.xyz.
Shin additionally outlined plans to deliver tokenized authorities bonds, wholesale central financial institution digital currencies and tokenized industrial financial institution deposits on a unified ledger, as half of an extension to “Undertaking Hangang,” a Bank of Korea-led pilot undertaking testing a blockchain-based wholesale CBDC system.
Hyun Track Shin, governor of the Bank of Korea, speaks throughout a panel dialogue on the ECB Discussion board on Central Banking. Supply: YouTube
Tokenized authorities bonds could enhance monetary innovation: BIS
Authorities bond tokenization may enhance market effectivity and help monetary innovation, offered regulatory and infrastructure challenges are addressed, based on a July 2025 report by the Bank for Worldwide Settlements (BIS).
Authorities securities play an important position within the monetary system, performing as a financial savings automobile for households and corporations and as collateral in a variety of transactions, the report mentioned, including:
“By enabling the contingent execution of actions, tokenisation can assist to reinforce the effectivity of markets, cut back settlement threat, broaden funding entry and spur the creation of new monetary providers.”
The report examined 39 tokenized bonds, together with 24 issued by firms and 15 by governments. In contrast with conventional, non-tokenized bonds, the BIS discovered “suggestive proof” of decrease bid-ask spreads and comparable issuance prices and yields.
Tokenized bonds vs typical, non-tokenized bonds, liquidity, issuance prices. Supply: BIS
