South Korea Set to Pilot Blockchain-Based Tokens for Government Expenditure

In the fourth quarter, South Korea's Ministry of Economy and Finance is scheduled to launch a trial of blockchain-based deposit tokens for government expenditure as part of a broader initiative to revolutionize the management of public funds. According to local media reports, the pilot program to utilize Treasury funds in the form of digital currency 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 introducing token-based payments, the government seeks to improve oversight and reduce the need for manual audits. The system is expected to lower transaction fees for small businesses receiving government payments by eliminating intermediaries such as card networks. Following an earlier pilot related to subsidies for electric vehicle-charging infrastructure, this marks the second instance of deposit tokens being used in Treasury operations. The trial is slated to take place in Sejong City, with plans for expansion if the program demonstrates enhanced control over spending and yields measurable cost savings.