Hyun Song Shin, governor of the Bank of Korea, praised tokenization for its ability to simplify government bond issuance and management.

Shin said on Wednesday panel discussion at the European Central Bank (ECB) Central Banking Forum in Sintra, Portugal, that tokenized bonds will facilitate collateral verification, crediting of the asset provider’s account and timely withdrawal of transactions.

“The biggest prize is tokenizing government bonds,” Shin said, adding that “it is much easier and much less error-prone if everything is tokenized.”

According to the data, U.S. Treasury debt is the largest tokenized asset class in the real world, representing $14.6 billion, or about 46% of the $31.7 billion RWA market supplier RWA.xyz.

Shin also outlined plans to introduce tokenized government bonds, wholesale central bank digital currencies and tokenized commercial bank deposits to the unified registry, as an extension of “Project Hangang,” a pilot project led by the Bank of Korea testing a wholesale blockchain-based CBDC system.

Hyun Song Shin, Governor of the Bank of Korea, speaks during a panel discussion at the ECB Forum on Central Banking. Source: YouTube

Tokenized government bonds could spur financial innovation: BIS

According to a July 2025 report, tokenization of government bonds could improve market efficiency and support financial innovation, provided regulatory and infrastructure challenges are addressed report by the Bank for International Settlements (BIS).

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The report found that government securities play a key role in the financial system, acting as a savings instrument for households and businesses and as collateral for a range of transactions, adding:

“By enabling conditional execution, tokenization can help increase market efficiency, reduce settlement risk, expand access to investments, and drive the creation of new financial services.”

The report examined 39 tokenized bonds, including 24 issued by corporations and 15 by governments. Compared to established, non-tokenized bonds, BIS found “suggestive evidence” of lower bid-ask spreads and comparable issuance costs and yields.

Tokenized bonds vs. conventional, non-tokenized bonds, liquidity, issue costs. source: BIS

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