BOK Forms Tokenization Unit for Korea's Government Bonds

The Bank of Korea (BOK) has created an asset tokenization unit as part of its Digital Currency Office, aiming to tokenize Korean government bonds using the unified ledger, Korea's Digital Currency System (DCS).

This is not a new idea for the BOK; in September, they released a paper on Project Hangang that explored tokenizing government bonds.

The BOK believes hosting tokenized wholesale CBDC and government bonds on the same ledger enables many central bank activities, citing the work of the Bank for International Settlements (BIS) on Project Pine with the Federal Reserve Bank of New York.

Simulations showed how tokenization could automate some central bank operations such as margin calls, calculation of haircuts, and repo execution. This automation could make 24/7 central bank activities viable and support a faster response to crises.