The Bank of Korea has completed live tests using tokenised central bank reserves for cross-border payments in six major currencies, in what it views as a key step towards modernising international settlement through the BIS-led Project Agora.
The central bank confirmed it was one of 28 public and private institutions involved in the latest phase of Project Agora’s real-transaction trials, overseen by the Bank for International Settlements. The tests were run in an environment designed to replicate day-to-day payment operations, with the platform’s core functions and procedures assessed for reliability.
Payments were executed in Korean won, U.S. dollar, euro, British pound, Swiss franc and Japanese yen. On the South Korean side, KB Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank and Hana Bank all took part.
Across 17 different payment scenarios, participating institutions processed transactions totalling around 800,000 Swiss francs.
Multiple use cases trialled
According to the Bank of Korea, the testing covered a range of cross-border payment use cases. These included single-currency and dual-currency settlements between companies and banks, payment-versus-payment foreign exchange settlements, and transfers of funds within the same financial group.
For a domestic component of the pilot, the Bank of Korea worked with NongHyup Bank and Shinhan Bank to move 20 million won between the two commercial lenders using tokenised reserves. The central bank said it received payment instructions from both banks, then issued, transferred and redeemed tokenised reserve balances on the Project Agora platform to complete the transaction.
To check how the experimental system would interact with existing infrastructure, the trial also featured a manual link between Project Hangang – the Bank of Korea’s wholesale central bank digital currency (CBDC) platform – and the central bank’s current financial network. This was used to validate interoperability during the transaction process.
The Bank of Korea said more live-transaction exercises are planned as Project Agora broadens to include additional payment types and operational scenarios that were not covered in the latest round.
Commercial bank tests with deposit tokens
Alongside the central bank-focused work, KB Kookmin Bank conducted a separate test using deposit tokens for cross-border settlement. It became the first South Korean commercial bank to complete a deposit token payment trial with an overseas institution, after running a yen-based settlement with Japan’s MUFG Bank. KB Kookmin Bank said the outcome of that trial would underpin its participation in future phases of Project Agora.
These developments build on South Korea’s efforts to expand Project Hangang beyond internal pilots and into commercial payment rails.
Earlier this month, the Ministry of Science and ICT and the Korea Internet & Security Agency launched a 9.6 billion won programme to link Project Hangang with the country’s existing payment network. The scheme, led by the Korea Financial Telecommunications and Clearings Institute, involves nine commercial banks, payment gateway providers and major retailers testing deposit token payments for everyday retail transactions.
Rather than replacing current hardware, the project allows banks to issue deposit token wallets while merchants continue to use their existing point-of-sale terminals. Government bodies also plan to trial deposit tokens for public-sector payments before connecting the technology to South Korea’s digital public finance platform.
Distinction from stablecoins
The Bank of Korea has repeatedly drawn a clear line between deposit tokens and stablecoins. In its framework, deposit tokens are commercial bank deposits represented in tokenised form, issued via a wholesale CBDC platform run by the central bank. Stablecoins, by contrast, are separate digital assets backed by reserve assets and subject to their own regulatory model.
The successful trials come against the backdrop of Governor Shin Hyun-song’s digital finance agenda, set out after he took office in April. In his inaugural address, Shin said the Bank of Korea would keep scaling up Project Hangang while taking part in global initiatives such as Project Agora, with the twin goals of reinforcing cross-border payment infrastructure and strengthening the role of the Korean won in digital finance.
Although legislators are continuing to work on stablecoin rules within a proposed Digital Asset Basic Act, Shin’s remarks concentrated on wholesale CBDCs and tokenised bank deposits rather than privately issued stablecoins. His earlier research at the Bank for International Settlements warned that the proliferation of private stablecoins could fragment payment systems, though subsequent reports suggested he had become more open to allowing stablecoins to coexist with CBDCs under a suitable regulatory framework.
Stablecoin law still in development
While the central bank advances its work on tokenised reserves and deposit tokens, lawmakers and regulators are designing a separate legal regime for stablecoins.
The Financial Services Commission recently told the National Assembly it intends to merge 10 outstanding digital asset bills into a single Digital Asset Basic Act. That legislation is expected to address stablecoin issuance, trading platforms, disclosure standards, governance and operational resilience. A final draft and formal submission timetable have not yet been made public.
In parallel, a policy report from Hashed Open Research and the Solana Policy Institute urged the introduction of interim licensing guidelines for won-backed stablecoins ahead of the full law. Participants at a June symposium cited in the report argued that temporary rules could enable regulated firms to prepare for issuing stablecoins and offering payment services while political negotiations on the final framework continue.
The Bank of Korea has maintained that commercial banks should have a central role in any future stablecoin model, citing concerns around monetary policy, foreign exchange management and financial stability. However, ownership rules for potential stablecoin issuers remain unresolved, with legislators and regulators still in talks before the proposed Digital Asset Basic Act moves forward.
