Shin Hyun-song: 'Tokenization is the core of currency reform... bonds and stocks will also be tokenized'

Bank of Korea Governor Shin Hyun-song declared that "tokenization is at the heart of currency system innovation," emphasizing that this technology will apply not only to money but also to assets such as government bonds and stocks. Tokenization refers to the conversion of assets like stocks and bonds into digital assets using blockchain technology, allowing for real-time transactions without intermediaries.

Shin shared these views in a paper titled "Real-World Implementation of the Integrated Ledger: Lessons from Project한강," presented at the European Central Bank's (ECB) Central Bank Forum in Sintra, Portugal. Project한강 is a CBDC pilot project jointly undertaken by the Bank of Korea and major domestic banks, aimed at applying digital coin technology and financial systems in a real-world environment. The Bank of Korea conducted initial tests with seven banks from April to June last year, establishing a digital currency system and processing actual transactions.

The second phase of Project한강, set to begin in the latter half of this year, will expand to include nine participating banks and introduce convenience features like biometric authentication and automatic conversion between deposits and deposit tokens. Beyond this, Shin identified two additional considerations: tokenizing "assets" in addition to money and deposits, and linking "Project Agora" (an international token-based payment experiment) with the digital currency system.

He cited government bonds as a prime example of tokenizable assets, explaining that their issuance and circulation within an integrated ledger would enable simultaneous exchange of ownership and payment, automating collateral management. This, he argued, would support the central bank's core responsibilities of monetary policy and financial stability. Furthermore, linking Project Agora with the digital currency system could reduce costs by processing foreign exchange and securities settlements in a single transaction, thereby increasing the international usability of the Korean won.