South Korea’s Ministry of Finance and Economy is preparing to introduce a system that uses “deposit tokens” to cover certain operating expenses in place of the standard government card method, Kyunghyang Shinmun reported on Thursday.
This will be tested through a pilot project that will begin in the fourth quarter of 2026 starting in Sejong City.
Deposit tokens are a blockchain-based form of digital money that represents real currency. They differ from typical crypto assets because they are stable and can include built-in rules that control how they are used.
Under the existing framework, expenditures are reviewed after they are incurred and transactions that fall outside normal guidelines are required to be explained. The new approach allows conditions to be set in advance, preventing fraud and ensuring all payments are automatically tracked.
Officials believe this will allow payments to be made directly without going through third-party processors, increasing financial transparency, reducing administrative burdens and reducing transaction fees for businesses.
The initiative is being conducted under a regulatory sandbox that allows for temporary exemptions, as current regulations require the use of purchasing cards. The project aims to systematically test whether a digital blockchain-based system can improve the way government funds are distributed and managed.
