South Korea is making bold strides in the realm of digital finance, positioning itself as a regional leader in blockchain integration and central bank digital currency (CBDC) innovation. With the Bank of Korea (BOK) actively exploring the deployment of tokenized deposits—known locally as preon tokens—onto public blockchains, and participating in high-impact international collaborations, the country is setting a new benchmark for digital financial infrastructure. In contrast, Taiwan’s progress remains cautious and largely confined to private networks, raising concerns about its competitiveness in the fast-evolving landscape of digital assets.
This growing divergence highlights a critical moment for policymakers and financial institutions across East Asia. As global economies pivot toward tokenized finance and cross-border digital settlement systems, South Korea's proactive strategy offers valuable insights into how nations can balance innovation with regulatory oversight.
Tokenized Deposits Go Public: BOK's Vision for On-Chain Integration
In a landmark statement at the 8th News1 Blockchain Leaders Club event on May 27, 2025, Lee Jong-yeol, Vice Governor-designate of the Bank of Korea, revealed a forward-looking roadmap:
“We are considering linking the Bank of Korea’s issued ‘preon tokens’ with public blockchain systems… We are envisioning a future where preon tokens coexist with privately issued stablecoins within a unified digital currency ecosystem. As the monetary and foreign exchange authority, BOK is driving this initiative from a national perspective, aiming to securely and sustainably develop our digital currency infrastructure.”
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The term preon token refers to a deposit-backed digital instrument issued within a BOK-managed system. While not a full CBDC, it functions similarly—pegged to commercial bank deposits and backed by central bank credibility. By connecting these tokens to public blockchains, South Korea aims to unlock programmability, interoperability, and real-time settlement capabilities that traditional systems cannot match.
This move signals a significant shift: rather than isolating digital currency experiments within closed environments, BOK is embracing open, decentralized networks. Such openness fosters greater innovation while maintaining control over monetary policy and financial stability.
Project Agorá: Building a Global Cross-Border Stablecoin Platform
South Korea’s domestic initiatives are complemented by its participation in Project Agorá, an international collaboration led by the Bank for International Settlements (BIS) and the Institute of International Finance (IIF). The project brings together central banks from seven major economies—including the U.S., U.K., Japan, France, Switzerland, Mexico, and South Korea—to explore how CBDCs and tokenized bank deposits can transform cross-border payments.
A core objective of Project Agorá is to prevent unilateral dominance by global stablecoins (such as USDT or USDC), which could undermine national monetary sovereignty. The platform is designed so that one country’s tokenized deposits cannot be directly used in another jurisdiction without proper regulatory gateways—ensuring compliance, anti-money laundering (AML) integrity, and policy autonomy.
Lee emphasized that this layered architecture protects domestic financial systems while enabling efficient international transactions. Pilot testing for Project Agorá is expected in the second half of 2025, potentially setting a precedent for multilateral digital currency cooperation.
Domestic Momentum: Project Han River and Regulatory Clarity
Beyond international efforts, South Korea is advancing its own national agenda through Project Han River, a domestic initiative focused on developing a robust digital won infrastructure. The ruling Democratic Party has established a dedicated Digital Asset Committee to accelerate legislation around stablecoins, security token offerings (STOs), and crypto exchange regulations.
Notably, Korean authorities assert that any stablecoin pegged to the Korean won must be subject to central bank oversight and require formal authorization. This regulatory clarity provides legal certainty for businesses while safeguarding against systemic risks.
The 8th News1 Blockchain Leaders Club event brought together parliamentarians, executives from major exchanges like Upbit and Bithumb, representatives from DAXA (Digital Asset Exchange Association), financial institutions, fintech firms, and blockchain startups. This broad coalition underscores a strong public-private alignment—a key enabler of rapid innovation.
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Why Taiwan Lags Behind: Caution vs. Competitiveness
In contrast, Taiwan’s approach to digital finance remains largely experimental and insular. While the Central Bank of the Republic of China (Taiwan) has announced plans to pilot a digital New Taiwan Dollar on a private blockchain network as early as July 2025, there has been no official discussion about integrating such tokens with public blockchains.
Moreover, Taiwan lacks a comprehensive regulatory framework for stablecoins. No clear timeline or legislative proposal exists for licensing or supervising privately issued digital assets tied to the NTD. This regulatory ambiguity discourages investment and limits technological development.
The reluctance to embrace public blockchains reflects deeper institutional caution—but at what cost? As South Korea tests tokenized deposits in real-world retail environments (e.g., 7-Eleven’s CBDC pilot with 10% discounts), Taiwan remains in research mode. This gap may widen as Seoul moves toward legalizing Bitcoin ETFs and allowing regulated institutions to issue local-currency stablecoins.
FAQ: Common Questions About Tokenized Deposits and Digital Finance
Q: What is a tokenized deposit?
A: A tokenized deposit represents a commercial bank deposit converted into a blockchain-based digital asset. It retains its value in fiat currency but gains benefits like faster transfers, programmability, and integration with decentralized finance (DeFi) applications.
Q: How is a tokenized deposit different from a CBDC?
A: A CBDC is direct liability of the central bank, like digital cash. A tokenized deposit is backed by commercial bank funds but may be issued under central bank supervision. Both can coexist in a layered digital currency system.
Q: Can tokenized deposits be used internationally?
A: Not freely. Under frameworks like Project Agorá, cross-border usage requires regulatory approval to protect monetary sovereignty and prevent capital flight or illicit flows.
Q: Is South Korea allowing private stablecoins?
A: Yes—but only if they’re pegged to the won and authorized by the central bank. Unauthorized foreign stablecoins face increasing scrutiny and restrictions.
Q: Why hasn’t Taiwan adopted public blockchains for digital currency?
A: Concerns over data privacy, regulatory control, and cybersecurity have led Taiwan to favor permissioned (private) blockchains. However, this limits scalability and innovation compared to open networks.
Q: Could tokenized deposits replace traditional banking?
A: Not replace—but enhance. They offer new tools for payments, lending, and asset management while operating within regulated financial boundaries.
Final Outlook: The Race for Digital Sovereignty
South Korea’s strategy—combining public blockchain integration, international collaboration, and clear regulation—is creating a resilient foundation for the future of money. Meanwhile, Taiwan’s measured pace risks falling behind in talent attraction, financial innovation, and geopolitical influence in digital finance.
As more nations explore tokenization, stablecoin regulation, and cross-border payment modernization, the lessons from Seoul’s approach are clear: embracing open technology does not mean sacrificing control. With smart governance, countries can harness blockchain’s potential while preserving monetary sovereignty.
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For regions like Taiwan, the time to act is now—not just to catch up, but to co-shape the next era of global finance.