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 trial of blockchain-based tokens for government expenditure in the fourth quarter, as part of a broader initiative to modernize public fund management. According to local media reports, the pilot project, which involves using digital currency to spend Treasury funds, has been approved under the 2026 regulatory sandbox program. This approval enables the use of tokenized deposits to cover business promotion expenses, which are currently processed using government purchasing cards. By introducing token-based payments, the government aims to enhance oversight and reduce the need for manual audits, particularly for transactions that occur outside standard hours. The new system is also expected to lower transaction fees for small businesses that receive government payments by removing intermediaries such as card networks. Following a previous pilot project related to subsidies for electric vehicle-charging infrastructure, this initiative marks the second instance of deposit tokens being used in Treasury operations. The trial is scheduled to take place in Sejong City, with participating firms to be selected through a designated process. If the program yields positive results in terms of spending control and cost savings, the ministry plans to expand it further.