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

In the fourth quarter, South Korea's Ministry of Economy and Finance is set to launch a pilot program for testing blockchain-based deposit tokens as a means of managing government expenditure, as part of a broader initiative to modernize public fund management. According to local media reports, the ministry has obtained approval for the pilot under the 2026 regulatory sandbox program, which will enable the use of digital currency for Treasury fund expenditures. This approval will allow for the use of tokenized deposits to cover business promotion expenses, which are currently processed using government purchasing cards. By introducing token-based payments, the government aims to enhance oversight and reduce the need for manual audits, particularly in cases where spending occurs outside standard hours. The new system is expected to minimize transaction fees for small businesses receiving government payments by removing intermediaries such as card networks. This initiative marks the second instance of deposit tokens being utilized in Treasury operations, following a previous pilot program related to subsidies for electric vehicle-charging infrastructure. The trial is scheduled to take place in Sejong City, following a selection process for participating firms, and the ministry plans to expand the program if it yields positive results in terms of spending control and cost savings.