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

In the fourth quarter, South Korea's Ministry of Economy and Finance is slated to launch a pilot program for utilizing blockchain-based deposit tokens in government spending, as part of a broader initiative to revamp the management of public funds. The ministry has announced that the pilot project, which involves the use of digital currency for Treasury fund expenditures, has been approved under the 2026 regulatory sandbox program, as reported by local media outlets. This approval facilitates the use of tokenized deposits for business promotion expenses, which are currently processed using government purchasing cards. By transitioning to a token-based system, the ministry aims to enhance oversight and streamline the expenditure process. The new system allows for the programming of predefined conditions, including spending limits and industry-specific usage, which can help reduce the need for manual audits and lower transaction fees for small businesses receiving government payments. This pilot program marks the second instance of deposit tokens being utilized in Treasury operations, following an earlier trial related to subsidies for electric vehicle-charging infrastructure. The trial is set to take place in Sejong City, following a selection process for participating firms, with plans for potential expansion if the program demonstrates improved control over spending and notable cost savings.