South Korea to Introduce Blockchain-Based Deposit Tokens for Government Expenditure in Q4

As part of a larger effort to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter, utilizing blockchain-based deposit tokens for government expenditure. The initiative, approved under the 2026 regulatory sandbox program, aims to replace traditional government purchasing cards with tokenized deposits for business promotion expenses. By doing so, it alters the existing system governed by the Treasury Funds Management Act, which previously relied on card-based payments. The introduction of token-based payments is expected to enhance oversight, as these can be programmed with specific conditions such as spending limits and industry restrictions, potentially reducing manual audits and lowering transaction fees for small businesses. This pilot program follows an earlier trial involving deposit tokens for electric vehicle-charging infrastructure subsidies and is scheduled to take place in Sejong City after a selection process for participating firms, with plans for expansion if the program demonstrates improved spending control and cost savings.