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 enables the use of tokenized deposits to pay for business promotion expenses that are currently processed using government purchasing cards. By leveraging token-based payments, which can be programmed with specific conditions such as spending limits and industry restrictions, the government 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. This initiative marks the second instance of deposit tokens being used in Treasury operations, following a previous pilot related to subsidies for electric vehicle-charging infrastructure. The trial is scheduled to take place in Sejong City, with plans for expansion if the program demonstrates improved spending control and significant cost savings.