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 pilot program testing the use of blockchain-based deposit tokens for government spending, as part of a larger effort to modernize public fund management. According to local media reports, the ministry's plan to use digital currency for Treasury fund expenditure has been approved under the 2026 regulatory sandbox program. 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 ministry aims to enhance oversight and streamline the payment process. The new system allows for the programming of predefined conditions, including spending limits and industry-specific usage, which can help reduce the need for manual audits and lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this initiative marks the second instance of deposit tokens being utilized 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.