Key Highlights
South Korea's Ministry of Economy and Finance will pilot blockchain-based deposit tokens for government expenses in Q4 2026, replacing traditional purchasing cards in select Treasury transactions.
The tokens can be programmed with spending limits, eligible industries, and time windows, cutting audit overhead and trimming transaction fees by removing card-network intermediaries.
It is the country's second Treasury deposit token experiment, following an earlier EV-charging subsidy trial, and forms part of a broader push to digitize public finance under the 2026 regulatory sandbox.
South Korea is moving forward with a plan to run official government payments on blockchain rails. The Ministry of Economy and Finance has approved a Q4 pilot of tokenized deposits to cover business promotion expenses, a category currently handled through government-issued purchasing cards.
The pilot will launch in Sejong City, with potential expansion depending on performance, according to reporting on the approval. It operates under a temporary carve-out from the Treasury Funds Management Act, which normally mandates card-based payment systems for state expenditures.
Unlike card transactions, deposit tokens can encode rules at the protocol level, including caps on amounts, restricted merchant categories, and expiration windows. That turns compliance into code, reducing the need for after-the-fact audits and removing the middle layer that usually collects transaction fees on public-sector spending.
Nine major domestic banks, including KB Kookmin, Shinhan, Woori, and Hana, are participating in the issuance and management of the tokens. Their involvement signals that Seoul wants tokenized deposits to operate inside the regulated banking perimeter rather than through stablecoin issuers or standalone fintechs.
South Korea is part of a broader Asia-wide experiment with programmable money for public budgets. If the Sejong trial succeeds, officials expect the model to scale across a far larger share of treasury operations, consistent with the country's stated goal of digitizing a significant portion of treasury fund executions by 2030.
