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

As part of its efforts to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter, testing the use of blockchain-based deposit tokens for government expenditure. The initiative, approved under the 2026 regulatory sandbox program, will enable the use of digital currency for Treasury fund expenditures. This move will replace the traditional government purchasing card system for business promotion expenses, allowing for more flexible and efficient transactions. The new system will operate outside the existing Treasury Funds Management Act, which previously mandated card-based payments. By implementing token-based payments with programmable conditions, such as spending limits and industry-specific usage, the government expects to enhance oversight and reduce the need for manual audits. Additionally, the removal of intermediaries like card networks is anticipated to lower transaction fees for small businesses receiving government payments. Following a successful pilot for electric vehicle-charging infrastructure subsidies, this trial will be conducted in Sejong City, with plans for expansion if it demonstrates improved spending control and cost savings.