South Korea to Introduce Blockchain-Based Deposit 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 expenditure, as part of a larger effort to modernize public fund management. According to local media reports, the pilot program has been approved under the 2026 regulatory sandbox initiative, allowing for the use of tokenized deposits to pay for business promotion expenses, which are currently processed using government purchasing cards. By leveraging token-based payments, government agencies can enforce predefined spending conditions, including time limits and industry-specific restrictions, potentially reducing the need for manual audits and lowering transaction fees for small businesses. This development marks the second instance of deposit tokens being utilized in Treasury operations, following a previous pilot project focused on subsidies for electric vehicle charging infrastructure. The trial is scheduled to take place in Sejong City, with plans for expansion if the program demonstrates enhanced spending control and significant cost savings.