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

As part of a larger effort to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a trial of blockchain-based deposit tokens for government expenditure in the fourth quarter. According to local media reports, the ministry has received approval for the pilot under the 2026 regulatory sandbox program, enabling the use of digital currency for Treasury fund expenditures. This innovation will replace the traditional government purchasing card system for business promotion expenses, allowing agencies to operate outside the constraints of the Treasury Funds Management Act. The new system is expected to enhance oversight, as token-based payments can be pre-programmed with specific conditions such as spending limits and industry restrictions. By reducing the need for manual audits and removing intermediaries like card networks, the ministry anticipates lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this trial marks the second application of deposit tokens in Treasury operations. The program will be launched in Sejong City after a selection process for participating firms, with plans for expansion if it demonstrates improved spending control and cost savings.