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 trial of blockchain-based deposit tokens for government expenditure in the fourth quarter, as part of a larger effort to modernize the management of public funds. According to local media reports, the pilot project, which involves the use of digital currency for Treasury fund expenditures, 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 allowing agencies to operate outside the traditional rules governed by the Treasury Funds Management Act, the trial aims to test new methods and improve oversight. The introduction of token-based payments, which can be programmed with predefined conditions such as spending limits and industry-specific usage, is expected to reduce the need for manual audits and lower transaction fees for small businesses receiving government payments. The trial, which will take place in Sejong City, marks the second instance of deposit tokens being used in Treasury operations, following a previous pilot project related to subsidies for electric vehicle-charging infrastructure. If the trial demonstrates enhanced control over spending and significant cost savings, the ministry plans to expand the program.