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

In the fourth quarter, the South Korean Ministry of Economy and Finance is set to launch a trial of blockchain-based deposit tokens for government expenditure as part of a broader initiative to modernize public fund management. According to local media reports, the ministry has received approval for the pilot under the 2026 regulatory sandbox program, allowing for the use of digital currency to spend Treasury funds. This move enables the replacement of traditional government purchasing cards with tokenized deposits for business promotion expenses. By operating within a sandbox environment, government agencies can temporarily bypass existing regulations to test innovative methods. The introduction of token-based payments, which can be programmed with predefined conditions such as spending limits and industry-specific usage, is expected to enhance oversight and reduce the need for manual audits. Furthermore, the removal of intermediaries like card networks may lead to lower transaction fees for small businesses receiving government payments. This trial follows an earlier pilot project that utilized deposit tokens for subsidies related to electric vehicle-charging infrastructure. The upcoming trial will take place in Sejong City, with plans for expansion if it demonstrates improved spending control and significant cost savings.