South Korea tests tokenized reserves for cross-border banking

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Korea tests tokenized reserves

Highlights

The trial covered six major currencies.
Banks transferred 20 million won in tokenized reserves.
More payment scenarios will be tested next.

Crypto.News reported that the exercise involved the Korean won, U.S. dollar, euro, British pound, Swiss franc, and Japanese yen. Five South Korean lenders participated: KB Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank, and Hana Bank.

Six currencies and 17 payment scenarios

Institutions processed transactions worth roughly 800,000 Swiss francs across 17 scenarios, including single- and dual-currency payments, foreign-exchange settlements using payment-versus-payment arrangements, and transfers within the same financial group. The Bank of Korea said the platform’s core functions and operating processes performed reliably during the exercise.

In a domestic test, NongHyup Bank and Shinhan Bank transferred 20 million won using tokenized reserve funds. The central bank issued, moved, and redeemed the reserves after receiving instructions from the two commercial banks.

The transaction also tested a manual connection between Project Agorá and Project Hangang, South Korea’s wholesale central bank digital currency platform. The link was intended to assess whether the new tokenized system could interoperate with the Bank of Korea’s existing financial network.

Building a regulated tokenized payment network

Project Agorá combines tokenized commercial bank deposits with tokenized central bank reserves on a shared platform. The BIS says the model could allow atomic, multicurrency settlement, meaning the payment and exchange of assets occur together rather than through separate, sequential processes.

The Bank of Korea is also expanding Project Hangang into domestic payment infrastructure. A separate 9.6 billion won program is connecting deposit-token wallets with existing payment terminals, allowing merchants to retain current point-of-sale systems while banks test new settlement technology.

A test of the future banking system

The exercise matters because cross-border payments remain fragmented, costly, and dependent on several intermediaries. Tokenized reserves could reduce settlement risk while preserving the role of regulated banks and central bank money.

The Bank of Korea has drawn a clear distinction between deposit tokens and privately issued stablecoins. Its approach places central bank reserves and commercial bank deposits at the core of tokenized finance, with stablecoins potentially playing a supplementary role under a separate regulatory framework.

Earlier, we reported that South Korea prepares legal framework for won stablecoins.

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