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

The South Korean Ministry of Economy and Finance is set to launch a trial of blockchain-based tokens for government expenditure in the fourth quarter, as part of a broader initiative to enhance the management of public funds. According to local media reports, the ministry has received approval for a pilot program to utilize digital currency for Treasury fund expenditure 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 operating outside the constraints of the Treasury Funds Management Act, which traditionally required card-based payments, agencies will be able to test new methods in a sandbox environment. Officials anticipate that this change will improve oversight, as token-based payments can be programmed with predefined conditions such as spending limits and industry-specific usage. This could lead to a reduction in manual audits, particularly for spending that occurs outside standard hours. Furthermore, the removal of intermediaries such as card networks is expected to lower transaction fees for small businesses receiving government payments. This marks the second instance of deposit tokens being used 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 stronger control over expenditure and measurable cost savings.