South Korea’s Ministry of Economy and Finance plans to test blockchain-based payments for government operational spending. A pilot using tokenized deposits will launch in Sejong City, with predefined spending conditions on timing and usage categories. The full rollout is targeted for the fourth quarter of 2026, moving the country’s deposit-token experiments into day-to-day public finance.
South Korea’s Ministry of Economy and Finance (MOEF) is preparing to test blockchain-based payments for certain government expenses under a regulatory sandbox. The ministry said it selected a pilot project that will use tokenized deposits to execute government operational spending, targeting a full rollout in Q4 2026. The program will initially launch in Sejong City to test predefined spending conditions, including limits on timing and usage categories.
Tokenized deposits are digital representations of traditional bank deposits on blockchain infrastructure. Unlike many stablecoins, they remain bank liabilities and are designed to operate within the existing financial system.
The pilot moves South Korea’s deposit-token experiment beyond subsidies and into day-to-day public spending. It offers an early test of whether programmable bank-backed money can make government payments more traceable and harder to misuse.
As part of the sandbox, the ministry will work with participating institutions to define the trial’s scope. The initiative will focus on government operational expenses, which are currently processed through government-issued credit and debit cards managed through post-use reporting.
Under the pilot, spending parameters such as time windows and permitted categories will be predefined. This allows authorities to test whether tokenized deposits can improve oversight and reduce misuse of funds.
The sandbox approval enables the use of tokenized deposits for fund execution despite existing rules. According to the ministry, the trial will serve as a basis for evaluating new payment and settlement methods, with potential implications for broader fiscal operations.
The move follows South Korea’s earlier decision to use tokenized deposits for electric vehicle charging infrastructure subsidies, a pilot announced on March 19. MOEF previously stated it aims to convert one-quarter of treasury fund execution to digital currency by 2030, suggesting a broader effort to expand tokenized payment rails.
