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

The South Korean Ministry of Economy and Finance is set to initiate a trial of blockchain-based deposit tokens for government expenditure in the fourth quarter, as part of a larger effort to revolutionize the management of public funds. The ministry has announced that a pilot program to utilize Treasury funds in the form of digital currency has been approved under a 2026 regulatory sandbox initiative, as reported by local media outlets. This approval enables the use of tokenized deposits to cover business promotion expenses, which are currently processed using government purchasing cards. By transitioning to a token-based system, the government aims to enhance oversight and streamline the payment process. The new system allows for the programming of predefined conditions, including spending limits and industry-specific usage, which is expected to reduce the need for manual audits and lower transaction fees for small businesses receiving government payments. Following a successful pilot tied to subsidies for electric vehicle-charging infrastructure, this marks the second instance of deposit tokens being utilized in Treasury operations. The trial is scheduled to take place in Sejong City, with participating firms to be selected through a competitive process. If the program yields positive results in terms of spending control and cost savings, the ministry plans to expand its implementation.