South Korea to Introduce Blockchain-Based Tokens for Government 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, testing the use of blockchain-based deposit tokens for government expenditure. The initiative, approved under the 2026 regulatory sandbox program, aims to replace traditional government purchasing cards with tokenized deposits for business promotion expenses. This move marks a significant shift from the existing Treasury Funds Management Act, which previously mandated card-based payments. By operating within a sandbox environment, agencies will be able to test new methods outside the conventional rules. The introduction of token-based payments is expected to enhance oversight, as these can be programmed with specific conditions such as spending limits and industry restrictions. This, in turn, could reduce the necessity for manual audits, particularly in cases of non-standard hour spending. Furthermore, the removal of intermediaries like card networks is anticipated to lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this trial will be conducted in Sejong City, with plans for expansion if it demonstrates improved spending control and significant cost savings.