South Korea's CBDC pilot expands to nine banks in September
In brief
- Bank of Korea launches Project Hangang phase two in September with nine participating banks
- Kyongnam Bank and iM Bank join pilot, expanding participation from seven to nine institutions
- New features include peer-to-peer transfers, biometric authentication, and government subsidy payment testing
- Phase one (April–June 2025) processed 114,880 transactions across 81,000 participants
Expansion and new features
Kyongnam Bank and iM Bank will join the existing group of participants, bringing the total to nine participants. The second phase will explore commercialization by adding peer-to-peer transfers, biometric authentication and new automated deposit token features. These additions move beyond the infrastructure focus of the first phase.
The first phase was conducted from April to June 2025, attracting about 81,000 participants who completed 114,880 transactions using deposit tokens. That pilot focused on payment infrastructure and demonstrated the viability of the core mechanism.
How Project Hangang works
Project Hangang uses a blockchain-based wholesale CBDC issued by the central bank as the settlement asset for deposit tokens issued by commercial banks. Consumers can then use the bank-issued tokens for everyday payments. This structure separates the central bank's wholesale layer from retail payment experience, allowing each bank to issue its own tokenized deposit product.
The addition of government subsidy testing represents a significant step toward real-world use cases. If successful, it could demonstrate how tokenized deposits simplify and accelerate welfare disbursements.
