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

The South Korean Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter, utilizing blockchain-based deposit tokens to modernize the management of public funds. According to local reports, the initiative has been approved under the 2026 regulatory sandbox program, enabling the use of digital currency for Treasury fund expenditure. This development permits the replacement of traditional government purchasing cards with tokenized deposits for business promotion expenses. By operating within a sandbox environment, government agencies can temporarily bypass existing regulations to test innovative approaches. The introduction of token-based payments, which can be programmed with specific conditions such as spending limits and industry restrictions, is expected to enhance oversight and reduce manual audits. Additionally, the removal of intermediaries like card networks may lead to lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this trial will be conducted in Sejong City after a selection process for participating firms, with plans for potential expansion if the program demonstrates improved spending control and cost savings.