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South Korea Tests Deposit Tokens in Bank-Linked CBDC Phase
South Korea's CBDC pilot adds deposit tokens at seven banks, replacing government subsidies with digital vouchers that settle instantly on existing bank rails.
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The Bank of Korea pushed its central bank digital currency into a second testing phase on Tuesday, integrating deposit tokens directly into the systems of seven commercial banks.
The pilot will let participants use the tokens for everyday transactions and settlements. A separate track will replace some government subsidy payments with digital vouchers issued through the same infrastructure.
Korea's approach differs from the retail-facing trials run in China and Nigeria. By embedding the token layer inside existing bank rails rather than creating a standalone wallet, the central bank minimizes the need for new user interfaces or merchant hardware. The deposit token is functionally a programmable liability of the issuing bank, backed by reserves at the central bank.
Woori, Shinhan, KB Kookmin and four other lenders are in the test group. The tokens will move between bank-issued wallets using a shared ledger maintained by the central bank. Settlement is near-instant, the Bank of Korea said.