Hyun Music Shin, the governor of the Financial institution of Korea, praised tokenization for its means to simplify the issuance and administration of presidency bonds.
Shin mentioned throughout a Wednesday panel dialogue on the European Central Financial institution (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 applicable time.
“The large 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, in keeping with information supplier RWA.xyz.
Shin additionally outlined plans to carry tokenized authorities bonds, wholesale central financial institution digital currencies and tokenized industrial financial institution deposits on a unified ledger, as a part of an extension to “Challenge Hangang,” a Financial institution of Korea-led pilot challenge testing a blockchain-based wholesale CBDC system.
Hyun Music Shin, governor of the Financial institution of Korea, speaks throughout a panel dialogue on the ECB Discussion board on Central Banking. Supply: YouTube
Tokenized authorities bonds might increase monetary innovation: BIS
Authorities bond tokenization may enhance market effectivity and help monetary innovation, supplied regulatory and infrastructure challenges are addressed, in keeping with a July 2025 report by the Financial institution for Worldwide Settlements (BIS).
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Authorities securities play an important position within the monetary system, appearing as a financial savings car for households and companies and as collateral in a variety of transactions, the report mentioned, including:
“By enabling the contingent execution of actions, tokenisation may also help to boost the effectivity of markets, cut back settlement threat, broaden funding entry and spur the creation of latest monetary providers.”
The report examined 39 tokenized bonds, together with 24 issued by companies 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 standard, non-tokenized bonds, liquidity, issuance prices. Supply: BIS
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