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South Korea launches $6.9M CBDC deposit token payment rollout

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South Korea launches $6.9M CBDC deposit token payment rollout

2026-07-22 09:51 UTCBy AlphaScala Research DeskSource reporting: Crypto newsEditorial standards

South Korea launches $6.9M CBDC deposit token payment rollout

The 9.6 billion won project will connect deposit tokens to existing payment rails, cutting costs for small merchants and testing government spending use cases.

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South Korea has started a nationwide project to bring deposit token payments into everyday commercial use, building on the Bank of Korea's wholesale CBDC pilot.

The Korea Internet & Security Agency (KISA) and the Ministry of Science and ICT said on July 22 that the initiative will run under the government's 2026 Blockchain Innovation Leading Project. The budget is 9.6 billion won, roughly $6.9 million.

The Korea Financial Telecommunications and Clearings Institute (KFTC) will lead the consortium. Nine commercial banks and eight payment gateway providers have joined. Two large merchants are also participating.

KFTC plans to connect South Korea's existing payment network with the Bank of Korea's Project Hangang infrastructure. That will let institutions process deposit token transactions through current banking rails instead of building a new system from scratch.

Consumers will pay using deposit token wallet apps issued by participating banks. Officials are also reviewing whether to introduce physical payment cards linked to those wallets. Merchants can keep using their existing point-of-sale terminals without replacing hardware.

KISA said one of the main goals is to turn the experience from Project Hangang's institutional CBDC pilot into payment services available to the general public. Authorities expect the approach to reduce settlement costs and ease payment fee burdens for small merchants.

Government agencies also plan to test deposit tokens for business expense programs. Eventually they want to connect the system with dBrain, South Korea's digital public finance platform, to support treasury management and other public spending. Programmable blockchain features would let authorities define spending conditions in advance and improve transparency, officials said.

The Ministry of Science and ICT said the initiative will support the domestic blockchain industry. About 3 billion won of the total budget has been allocated to development and operations work involving small and medium-sized enterprises, startups and IT companies. Participating banks are separately expected to invest around 4.5 billion won in related projects.

KISA Digital Infrastructure Division Director Shin Dae-gyu said the project represents the first stage of establishing a deposit token payment environment and could create opportunities for startups and IT companies to build new services on top of the infrastructure. He added that KISA would support secure implementation by drawing on its blockchain and cybersecurity expertise.

The rollout comes days after documents reviewed by the Korea Federation of Banks showed that the Bank of Korea and participating lenders had discussed operating deposit tokens on a continuous basis while preparing conditions for eventual commercialization.

As previously reported, the next phase of Project Hangang is expected to expand beyond payment validation by increasing the number of users and merchants, introducing person-to-person transfers and allowing individual banks to develop their own deposit token services. The plans also include business-to-business treasury payments, with government subsidies linked to electric vehicle charging infrastructure among the proposed use cases.

Commercial banks previously told the central bank that the second phase would require significantly more investment than simply extending the first pilot. Additional services would require anti-money laundering systems and new operational infrastructure, plus fraud detection capabilities. Following discussions with participating institutions, the Bank of Korea adjusted the project's timeline and provided commercialization consulting support.

South Korea has repeatedly distinguished deposit tokens from stablecoins despite both relying on blockchain technology. Deposit tokens represent commercial bank deposits issued through a wholesale CBDC framework operated by the Bank of Korea. Stablecoins are designed as separate digital assets backed by reserve assets under their own regulatory structure.

The latest payment project also aligns with the government's wider digital finance strategy. Earlier this month, South Korea unveiled a roadmap to make the won a freely convertible currency while introducing legal rules for won-backed stablecoins under the proposed Digital Asset Basic Act. The roadmap also included continued development of wholesale CBDC infrastructure, tokenized government bond pilots and participation in the Bank for International Settlements' Project Agora for cross-border payment systems.

At the same time, financial institutions have continued testing separate blockchain payment models outside the CBDC framework. HashKey Group, Kbank and BPMG recently signed an agreement to study won-backed stablecoins for cross-border payments and trade settlement. Toss Bank has partnered with the Solana Foundation to examine stablecoin-based international remittances.

Unlike those initiatives, the Bank of Korea's deposit token program continues to operate through a CBDC-backed banking model that uses tokenized commercial bank deposits rather than privately issued stablecoins. The approach keeps settlement within the regulated banking system while introducing programmable features that stablecoin advocates have long promoted.