Hyun Tune Shin, the governor of the Financial institution of Korea, praised tokenization for its potential 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 vulnerable to errors when you’ve got every little 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 convey tokenized authorities bonds, wholesale central financial institution digital currencies and tokenized business financial institution deposits on a unified ledger, as a part of an extension to “Mission Hangang,” a Financial institution of Korea-led pilot challenge testing a blockchain-based wholesale CBDC system.
Hyun Tune 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 could increase 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 Financial institution for Worldwide Settlements (BIS).
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Authorities securities play a vital function within the monetary system, appearing as a financial savings car for households and corporations and as collateral in a spread of transactions, the report mentioned, including:
“By enabling the contingent execution of actions, tokenisation might help to reinforce the effectivity of markets, scale back settlement danger, broaden funding entry and spur the creation of latest monetary companies.”
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 standard, non-tokenized bonds, liquidity, issuance prices. Supply: BIS
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