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

As part of a broader effort to modernize the management of public funds, South Korea's Ministry of Economy and Finance is set to launch a trial of blockchain-based deposit tokens for government spending in the fourth quarter. According to local media reports, the pilot program has been approved under the 2026 regulatory sandbox initiative, allowing for the use of tokenized deposits to cover business promotion expenses, which are currently processed using government purchasing cards. By leveraging token-based payments, officials anticipate improved oversight, as these payments can be pre-programmed with specific conditions, such as spending limits and industry restrictions. This is expected to reduce the need for manual audits, particularly in cases where spending occurs outside regular hours. Furthermore, the removal of intermediaries, including card networks, is likely to result in lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this marks the second instance of deposit tokens being utilized in Treasury operations. The trial is scheduled to take place in Sejong City, with participating firms to be selected through a designated process, and the ministry plans to expand the program if it yields enhanced spending control and notable cost savings.