South Korea has confirmed its ambitions in the digital assets sector: the economic strategy for the second half of the year includes the launch of a pilot project for tokenizing government bonds, which will take place in 2027. A key feature of the initiative is the integration of settlements for these instruments with the wholesale central bank digital currency (CBDC), intended exclusively for banks and financial institutions.
This decision is a logical continuation of the Hangang project being developed by the Bank of Korea. It is based on a closed distributed ledger that combines wholesale CBDC and tokenized bank deposits. Authorities also plan to explore the compatibility of this infrastructure with other blockchains, paving the way for cross-network interoperability. The parameters of the experiment itself have not yet been disclosed, but the strategic goals are already clear.
Unified Platform for Bonds and Digital Money
The idea of placing government bonds and digital money on a single platform was voiced by the head of the regulator, Shin Hyun-sung, as early as early July. This approach allows for the simultaneous transfer of securities and execution of payments, as well as the automation of operations through smart contracts. For the market, this means a radical acceleration of settlements, simplification of repo transactions, and increased efficiency in collateral management.
However, the regulator is not turning a blind eye to the risks. Faster movement of assets could accelerate the spread of financial stress among participants, while the use of smart contracts and external data sources creates additional operational threats. This is a classic example of how innovations require a reassessment of traditional risk management models.
Project Hangang: From Tests to Real-World Implementation
The first phase of Project Hangang, conducted from April to June 2025, has already proven the viability of the concept. It involved seven major banks, and digital wallets were opened by approximately 80,000 users out of 100,000 invited. Participants tested payments, person-to-person transfers, and programmable vouchers based on tokenized deposits.
The second phase, announced in March 2026, expanded the scope: two more banks joined the project, and one of the directions became government payments through deposit tokens linked to the CBDC. This is a direct step toward introducing the digital won into the real economy.
Legislative Framework: Stablecoins, ETFs, and Cross-Border Operations
In parallel with technological experiments, the government is advancing the Digital Asset Basic Act. The bill, which is intended to establish general requirements for crypto companies and issuers of stablecoins pegged to the won, is planned for adoption in the second half of 2026. However, its consideration has been delayed due to disagreements between the Bank of Korea and the Financial Services Commission over the rules for issuing stablecoins.
Separately, authorities are preparing a legal framework for cross-border stablecoin transactions and the launch of the country's first spot cryptocurrency ETFs. The legislative framework for tokenized securities has already been approved: relevant amendments were adopted in January 2026 and will take effect in early 2027.
My comment: South Korea is consistently building an ecosystem where the central bank digital currency and tokenized assets exist in a unified legal and technological field. This is not just an experiment but a strategic course toward modernizing financial infrastructure. However, success will depend on how quickly regulators can resolve disagreements over stablecoins—without this key element, the entire structure risks remaining incomplete.