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 upgrade the management of public funds. According to local media reports, the ministry has obtained approval for the pilot under the 2026 regulatory sandbox program, allowing it to utilize digital currency for Treasury fund expenditures. This development enables the use of tokenized deposits for business promotion expenses, which were previously processed using government-issued purchasing cards. By introducing this new system, officials aim to enhance oversight and streamline the process. The blockchain-based tokens can be programmed with predefined conditions, such as spending limits and eligible industries, 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 related to subsidies for electric vehicle-charging infrastructure. The trial is scheduled to take place in Sejong City, with plans for expansion if the program demonstrates improved control over spending and significant cost savings.