South Korea to Pilot Blockchain-Based Deposit Tokens for Public Expenditure in Q4

In a bid 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. According to local reports, the initiative has been approved under the 2026 regulatory sandbox program, allowing for the use of digital currency to disburse Treasury funds. This move will replace the traditional government purchasing card system for business promotion expenses with tokenized deposits. By operating within a sandbox environment, agencies will be able to test new methods outside the constraints of the Treasury Funds Management Act. The new system is expected to enhance oversight, as token-based payments can be programmed with specific conditions, such as spending limits and eligible industries. This is anticipated to reduce the need for manual audits, particularly for spending that occurs outside regular hours. Furthermore, the removal of intermediaries like card networks is expected to lower transaction fees for small businesses receiving government payments. Following a previous pilot program for electric vehicle-charging infrastructure subsidies, this marks the second instance of deposit tokens being used in Treasury operations. The trial 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 significant cost savings.