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

In the fourth quarter, South Korea's Ministry of Economy and Finance is set to launch a trial of blockchain-based tokens for government expenditure as part of a larger effort to modernize the management of public funds. According to local media reports, the ministry has obtained approval for a pilot program to utilize digital currency for Treasury spending under the 2026 regulatory sandbox initiative. This approval enables the use of tokenized deposits for business promotion expenses, which are currently processed using government purchasing cards. By transitioning to a token-based system, the government aims to enhance oversight and streamline processes. The new system allows for the programming of predefined conditions, including spending limits and restrictions on which industries can accept the tokens, potentially reducing the need for manual audits and lowering transaction fees for small businesses. This initiative marks the second instance of deposit tokens being used in Treasury operations, following a previous pilot project 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 positive results in terms of spending control and cost savings.