South Korea has officially launched a ₹750 crore (9.6 billion won) project to expand its CBDC-based deposit token payment system into everyday commercial use, building on the Bank of Korea's earlier pilot program. According to the Korea Internet & Security Agency (KISA) and the Ministry of Science and ICT, the project was selected under the government's 2026 Blockchain Innovation Leading Project program, with the Korea Financial Telecommunications and Clearings Institute (KFTC) leading the initiative. Nine commercial banks, eight payment gateway providers and two large merchants have joined the consortium to develop and test payment services using deposit tokens issued on top of the Bank of Korea's wholesale CBDC infrastructure.
The Bank of Korea (BOK) is scheduled to launch the second phase of its CBDC pilot in September 2025, introducing real-world transaction testing involving nine domestic banks. According to local reports, the central bank will provide the underlying institutional CBDC infrastructure, while participating financial institutions will issue and manage deposit tokens that customers can use for transactions. The expanded pilot will include major lenders such as KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, Gyeongnam Bank, and iM Bank. Bank of Korea officials said the next phase is intended to establish the foundation for eventual commercialization, with the broader objective of enabling digital won transactions regardless of time or location.
Under the new program, KFTC will connect South Korea's existing payment network with the Bank of Korea's Project Hangang infrastructure so participating institutions can process deposit token transactions through current banking rails rather than creating an entirely new payment system. Instead of replacing payment terminals, the project will allow consumers to pay using deposit token wallet applications issued by participating banks. Officials are also reviewing the possibility of introducing physical payment cards linked to deposit token wallets, with merchants continuing to use their existing point-of-sale terminals without hardware replacement. According to KISA, one of the project's main goals is to convert the experience gained during Project Hangang's institutional CBDC pilot into payment services available for the general public.
The Ministry of Science and ICT allocated ₹225 crore (3 billion won) of the total project budget to development, operations and promotional work involving small and medium-sized enterprises, startups and information technology companies. Participating banks are separately expected to invest around ₹375 crore (4.5 billion won) in related projects connected to the payment infrastructure. 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. The initiative will also support South Korea's domestic blockchain industry while reducing settlement costs and easing payment fee burdens for small merchants.
The latest payment project aligns with South Korea's comprehensive digital finance strategy, including the government's roadmap to make the Korean won a freely convertible currency while introducing legal rules for won-backed stablecoins under the proposed Digital Asset Basic Act. The roadmap also includes 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. Government agencies plan to extend deposit token technology beyond private-sector payments, testing them for government business expense programs before eventually connecting with dBrain, South Korea's digital public finance platform, to support treasury management and public spending functions. Meanwhile, financial institutions continue testing separate blockchain payment models outside the CBDC framework, with HashKey Group, Kbank and BPMG studying won-backed stablecoins for cross-border payments and Toss Bank partnering with the Solana Foundation for stablecoin-based international remittances.
