South Korea to test blockchain deposit tokens for government spending in Q4

Policy Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email South Korea to test blockchain deposit tokens for government spending in Q4 Token-based payments can be programmed with spending limits and which industries can use them, reducing audits and lowering transaction fees by removing intermediaries. By Francisco Rodrigues , AI Boost | Edited by Sheldon Reback Apr 16, 2026, 9:37 a.m. Make preferred on Seoul, South Korea. (Fukuro 0wl/Unsplash) What to know : South Korea's Ministry of Economy and Finance will test blockchain-based deposit tokens for government spending in the fourth quarter, replacing traditional purchasing cards. Token-based payments can be programmed with spending limits and with restrictions on how they can be spent, reducing audits and lowering transaction fees by removing intermediaries. This will be the second deposit token pilot after an earlier electric vehicle-charging subsidy program. South Korea’s Ministry of Economy and Finance will begin testing blockchain-based deposit tokens for government spending in the fourth quarter as part of a broader push to modernize how public funds are managed. The ministry said the pilot to spend Treasury funds as digital currency was approved under a 2026 regulatory sandbox program, local media reported. The approval allows business promotion expenses, currently processed with government purchasing cards, to be paid using tokenized deposits. The change alters a long-standing system governed by the Treasury Funds Management Act, which required card-based payments. In the sandbox environment, agencies will be able to operate outside those rules on a limited basis to test new methods. Officials expect the change to improve oversight. Token-based payments can be programmed with predefined conditions, including limits on when funds can be used and which industries can accept them. This could reduce the need for manual audits, especially when spending occurs outside standard hours. The system also removes intermediaries such as card networks, which the ministry says could lower transaction fees for small businesses that receive government payments. This marks the second use of deposit tokens in Treasury operations, following an earlier pilot tied to electric vehicle-charging infrastructure subsidies. The trial will take place in Sejong City after a selection process for participating firms, the report states. The ministry plans to expand the program if it shows stronger control over spending and measurable cost savings. tokenized deposits South Korea AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Circle CEO says China could launch yuan stablecoin within 3 to 5 years as currency race heats up By Sam Reynolds | Edited by Omkar Godbole 25 minutes ago The pitch is global scale for the yuan, but capital controls, offshore limits and convertibility gaps still stand in the way What to know : Circle CEO Jeremy Allaire said he sees a "tremendous opportunity" for a yuan-backed stablecoin and predicted China could launch one within three to five years. The idea has shifted from speculation to potential policy, as Chinese officials have reportedly explored a yuan stablecoin despite the country’s ban on crypto trading... Read full story Latest Crypto News The cheapest bitcoin ETF yet: Morgan Stanley uses 0.14% fee to draw $100 million in first week 1 min. ago Crypto fund manager probed in the suspicious death of his fiancé’s death in Zanzibar 17 minutes ago Circle CEO says China could launch yuan stablecoin within 3 to 5 years as currency race heats up 25 minutes ago Buying coffee with bitcoin is easy, the resulting tax burden is not 49 minutes ago The CLARITY Act breakthrough: Why JPMorgan says the U.S. crypto rulebook is ‘close to completion’ 1 hour ago Bitcoin is testing a level that capped its rally in January, CryptoQuant says 2 hours ago Top Stories Bitcoin rally is taking a breather near $75,000. Onchain data shows why 3 hours ago Ripple partners with Korea's Kyobo Life to tokenize government bond settlement 4 hours ago Bitcoin steady as S&P 500 hits record, but options market isn't buying the peace trade 4 hours ago Bitcoin devs bet a quantum attacker will play nice with a ‘wait and react’ plan 5 hours ago Dogecoin jumps 4.5% to nearly 10-cents, outperforming bitcoin and ether 4 hours ago Bitcoin's quantum debate splits as Adam Back pushes optional upgrades over forced freeze 3 hours ago