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

The South Korean Ministry of Economy and Finance is set to launch a trial of blockchain-based deposit tokens for government expenditure in the fourth quarter, as part of a larger effort to revolutionize the management of public funds. The ministry has obtained approval for a pilot program to utilize digital currency for Treasury expenditures under the 2026 regulatory sandbox initiative, according to local news sources. This approval enables the use of tokenized deposits to cover 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 the expenditure process. The new system allows for the programming of predefined conditions, including spending limits and industry-specific restrictions, which can help reduce the need for manual audits and lower transaction fees for small businesses receiving government payments. Following a previous pilot program focused on subsidies for electric vehicle-charging infrastructure, this initiative marks the second application of deposit tokens in Treasury operations. The trial is scheduled to take place in Sejong City, with participating firms to be selected through a designated process. If the program yields positive results in terms of spending control and cost savings, the ministry plans to expand it further.