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 deposit tokens for government spending, as part of a broader effort to modernize public fund management. According to local media reports, the pilot program has been approved under the 2026 regulatory sandbox initiative, enabling the use of digital currency for Treasury fund expenditure. This move will allow business promotion expenses to be paid using tokenized deposits, replacing the traditional government purchasing card system. The token-based payment system offers improved oversight, as it can be programmed with predefined conditions such as spending limits and industry-specific usage. By reducing the need for manual audits and removing intermediaries like card networks, the new system is expected to lower transaction fees for small businesses receiving government payments. Following a successful trial of deposit tokens for electric vehicle-charging infrastructure subsidies, this pilot program will be conducted in Sejong City after a selection process for participating firms, with plans for expansion if it demonstrates enhanced control over spending and significant cost savings.