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

In a bid to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter, utilizing blockchain-based deposit tokens for government expenditure. The initiative, approved under the 2026 regulatory sandbox program, aims to replace traditional government purchasing cards with tokenized deposits for business promotion expenses, as reported by local media. By operating within a sandbox environment, government agencies will be able to test novel methods, temporarily bypassing the constraints of the Treasury Funds Management Act, which previously mandated card-based payments. According to officials, this shift is expected to enhance oversight, as token-based payments can be programmed with predefined conditions, including time limits and industry-specific acceptance criteria, potentially reducing the need for manual audits, particularly outside standard working hours. Furthermore, the removal of intermediaries, such as card networks, is anticipated to lower transaction fees for small businesses receiving government payments, as stated by the ministry. This marks the second instance of deposit tokens being utilized in Treasury operations, following a previous pilot program related to subsidies for electric vehicle-charging infrastructure. The trial is scheduled to take place in Sejong City, following a selection process for participating firms, with plans for potential expansion if the program demonstrates improved control over expenditure and notable cost savings.