South Korea’s Ministry of Economy and Finance (MOEF) announced the launch of a pilot project.
The project will use tokenized deposits on a blockchain to pay for government expenditures.
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Currently, such spending is conducted through government credit and debit cards. The new mechanism will allow preset restrictions on usage time and spending categories. This is expected to increase transparency and reduce the risk of improper budget spending.
Pilot Details
The pilot project is scheduled for full launch in the Q4 of 2026. It will initially be implemented in Sejong, the country’s administrative capital.
During sandbox testing, the ministry will determine the scale of the experiment together with participants. Tokenized deposits will remain bank liabilities and operate within the existing financial system. The new technology is expected to reduce intermediary fees for small businesses and simplify reporting.
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Regulatory Pressure on Crypto Exchanges
The pilot launch comes amid tighter controls on crypto exchanges. In April 2026, the FIU fined Coinone $3.5 million and imposed a three-month partial business ban for AML violations, including failure to verify in 70,000 cases and transactions with unregistered foreign exchanges.
In March, Bithumb received a similar $24 million fine and a six-month ban.
Following these incidents, the Bank of Korea called on lawmakers to introduce circuit breakers to halt trading during abnormal activity and to require exchanges to perform automated balance reconciliation with the blockchain.
These measures are expected to be included in the upcoming Basic Act on Digital Assets. Discussions are set to intensify after the regional elections on June 3.
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