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

The South Korean Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter to test the use of blockchain-based tokens for government spending, as part of a broader effort to modernize public fund management. According to local media reports, the ministry has received approval for the pilot under a 2026 regulatory sandbox program, which will allow for the use of tokenized deposits to pay for business promotion expenses, currently processed using government purchasing cards. By programming token-based payments with predefined conditions, such as spending limits and industry-specific usage, the new system aims to enhance oversight and reduce the need for manual audits. Additionally, the removal of intermediaries like card networks is expected to lower transaction fees for small businesses receiving government payments. The pilot program, which will be conducted in Sejong City, marks the second instance of deposit tokens being used in Treasury operations, following a previous pilot related to electric vehicle-charging infrastructure subsidies. If successful, the program is expected to be expanded, with the ministry anticipating improved control over spending and significant cost savings.