The Bank of Korea (BOK) is considering tokenized government bonds following the successful initial phase of its digital currency initiative, Project Hangang. Meanwhile, South Korean financial regulators have referred two suspected crypto market manipulation cases to prosecutors, reinforcing a dual strategy of enforcement and innovation in the digital asset sector.
Speaking at the European Central Bank’s Sintra Forum in Portugal, Governor Shin Hyun-song explained that tokenizing financial assets could strengthen monetary policy, improve financial stability, and make cross-border payments more efficient. He described Project Hangang’s first phase as a demonstration of a unified ledger model where wholesale central bank digital currency and tokenized commercial bank deposits enabled instant payment and asset settlement with programmable compliance features. Settlement finality was achieved immediately after payment completion, reducing counterparty risk.
At home, the Financial Services Commission (FSC) approved referrals of two market manipulation cases during its 12th regular meeting on July 1. One case involves a crypto whale who accumulated nearly half of a token’s circulating supply and executed a large-scale pump-and-dump strategy. The suspect allegedly created artificial buying pressure across domestic and overseas exchanges, accepting losses abroad while extracting larger profits from South Korean platforms. The second referral targets the use of automated API trading alongside manual limit orders to fabricate demand signals before selling pre-accumulated tokens. The FSC warned investors about unexplained price spikes and unusually high trading volumes, and announced plans to strengthen market surveillance systems.
Building on Project Hangang’s momentum, the BOK now evaluates tokenized government bonds as a next strategic goal. Governor Shin noted that issuing bonds on the unified ledger would simplify settlement, collateral verification, and asset management, reducing operational errors. Phase two of the project, beginning in the second half of 2026, will expand digital currency applications into government spending programs, including electric vehicle charging subsidies and public-sector operating expenses. Shin also aims to connect the infrastructure with Project Agora, an international initiative for tokenized cross-border payments, to integrate foreign exchange and securities settlements into single programmable transactions, potentially strengthening the won’s international role.
