South Korea Moves CBDC Pilot Into Live Testing The Bank of Korea (BOK) has officially advanced its Central Bank Digital Currency (CBDC) program into real-world operation, marking a significan
The Bank of Korea (BOK) has officially advanced its Central Bank Digital Currency (CBDC) program into real-world operation, marking a significant step in South Korea's push toward a fully digital financial system. The pilot involves up to 100,000 people making real day-to-day transactions with a deposit token that is settled by banks using a wholesale CBDC.
The program, known as Project Hangang, is conducted in coordination with the Financial Services Commission (FSC). Users convert their bank deposits into deposit tokens to purchase goods and services, while the CBDC issued by the Bank of Korea is held only by participating banks and functions as a real-time settlement asset for deposit token transactions between banks.Payments are made by scanning QR codes at participating stores.
This transition marks a clear shift from technical sandbox testing to live integration within South Korea's financial architecture. The new phase trials large-scale, won-pegged deposit tokens built on a wholesale CBDC layer, aiming to cut transaction costs for both major corporations and small merchants burdened by credit card fees.
The second phase of Project Hangang adds two banks, Kyongnam Bank and iM Bank, to the program's original seven. The BOK has framed the cost-reduction potential as a key policy goal. By utilizing the deposit tokens, the BOK hopes to offer a lower-cost payment alternative for both large companies and small businesses that are currently burdened by credit card processing fees.
The pilot sits within a wider government digitization strategy. Finance Minister Koo Yuncheol has said the government wants to move one-quarter of treasury fund execution to digital currency by 2030. Meanwhile, a separate government-led initiative will test tokenized deposits for public spending, with a Sejong City pilot slated to begin and a full rollout planned for Q4 2026 as part of a regulatory sandbox.
South Korea's new central bank governor, Shin Hyun-song, has also thrown his weight behind the program. Shin used his first address in office to prioritize CBDCs and bank-issued deposit tokens, while leaving out any mention of stablecoins as South Korea weighs new crypto rules.The pilot advances as South Korea's broader Digital Asset Basic Act is delayed over disputes about who can issue KRW-pegged stablecoins.
Sources:CoinDesk: Bank of Korea kicks off real-world testing of its CBDC with nine banksHuman Rights Foundation CBDC Tracker: South KoreaCoinInsider: Korea Pilots Tokenized Deposits for State Spending
