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 pilot program in the fourth quarter to test the use of blockchain-based tokens for government expenditure as part of a larger effort to modernize public fund management. According to local media reports, the ministry has obtained approval for the pilot under the 2026 regulatory sandbox program, which will allow the use of digital currency to spend Treasury funds. The approved pilot will enable the use of tokenized deposits to pay for business promotion expenses, which are currently processed using government purchasing cards. By doing so, the ministry aims to improve oversight and reduce the need for manual audits, particularly for spending that occurs outside regular hours. The new system will also eliminate intermediaries such as card networks, potentially lowering transaction fees for small businesses that receive government payments. This initiative marks the second instance of using deposit tokens 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 enhanced control over spending and significant cost savings.