South Korea to Pilot Blockchain-Based Tokens for Government Expenditures in Q4

As part of its efforts to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter to test the use of blockchain-based deposit tokens for government spending. The initiative, approved under the 2026 regulatory sandbox program, aims to utilize digital currency for Treasury fund expenditures. According to local media reports, the pilot will enable the use of tokenized deposits for business promotion expenses, which are currently processed using government purchasing cards. By doing so, the ministry seeks to improve oversight and reduce the need for manual audits, particularly for transactions that occur outside standard hours. The token-based system allows for predefined conditions, including spending limits and eligible industries, to be programmed, thereby enhancing control over government expenditures. Additionally, the removal of intermediaries such as card networks is expected to lower transaction fees for small businesses receiving government payments. The pilot program will be conducted in Sejong City, following a selection process for participating firms, and is slated for expansion if it demonstrates improved control over spending and measurable cost savings.