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

In a bid to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a trial of blockchain-based deposit tokens for government spending in the fourth quarter. This initiative is part of a broader regulatory sandbox program approved for 2026, as reported by local media. The trial, which involves using digital currency to spend Treasury funds, aims to replace the traditional government purchasing card system for business promotion expenses. By utilizing tokenized deposits, the ministry seeks to improve oversight and reduce costs. The token-based system enables the programming of predefined conditions, such as spending limits and industry-specific usage, which can minimize the need for manual audits and lower transaction fees for small businesses receiving government payments. This pilot project is scheduled to take place in Sejong City, with plans for expansion if it demonstrates enhanced control over spending and significant cost savings. The introduction of deposit tokens in Treasury operations marks the second instance of such a system, following an earlier pilot project related to subsidies for electric vehicle-charging infrastructure.