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 deposit tokens for government expenditure as part of a broader effort to modernize the management of public funds. According to local media reports, the ministry has received approval for the pilot under a 2026 regulatory sandbox program, which will enable the use of digital currency for Treasury fund expenditure.
The program will replace the traditional government purchasing card system for business promotion expenses with tokenized deposits. By operating in a sandbox environment, government agencies will be able to test new methods outside of the existing rules governed by the Treasury Funds Management Act. The introduction of token-based payments is expected to enhance oversight, as these payments can be programmed with predefined conditions such as spending limits and industry-specific usage.
This could lead to a reduction in manual audits, particularly for spending that occurs outside of standard hours. Additionally, the removal of intermediaries such as card networks is expected to lower transaction fees for small businesses that receive government payments.
This pilot program marks the second instance of deposit tokens being used in Treasury operations, following an earlier trial related to subsidies for electric vehicle-charging infrastructure. The trial is scheduled to take place in Sejong City, and the ministry plans to expand the program if it yields stronger spending control and measurable cost savings.