South Korea's Bank of Korea moves to launch CBDC‑based deposit token pilot in September

The Bank of Korea’s central bank digital currency (CBDC) pilot, known as Project Hangang, is entering Phase 2, which could begin as early as September 2024. In this stage the Bank will issue a wholesale CBDC on a blockchain platform while participating commercial banks will create “deposit tokens” for everyday payments. The test expands from seven to nine banks – adding Gyeongnam Bank and iM Bank – and adds new user‑friendly features such as peer‑to‑peer transfers, biometric (finger‑print) authentication and automatic token deposits and withdrawals.

Phase 1, conducted from April to June 2023, involved about 81,000 e‑wallet users and recorded roughly 115,000 token transactions. Phase 2 will focus on commercial viability, allowing banks to include their own merchant partners as token‑accepting locations. The pilot will also evaluate government use cases, starting with the Ministry of Climate, Energy and Environment’s electric‑vehicle‑charging‑station subsidy program, where selected businesses will receive grants via token wallets. Additional public‑sector pilots, such as paying operating expenses with tokens, are planned, and the Bank of Korea is coordinating with the Ministry of Economy and Finance on a future bond‑tokenisation trial linked to the CBDC platform.