South Korea's Central Bank Expands CBDC Trials in September! Collaborates with 9 Banks to Open Up to 500,000 Users for 'Deposit Tokens'

Author: Kurumi, Crypto City

Project Hangang Enters Second Phase, Launching Real Transaction Tests in September

According to a report by ETNews Korea, South Korea's central bank digital currency (CBDC) trials are set to expand. The Bank of Korea (BOK) plans to launch the second phase of Project Hangang as early as September, increasing the number of participating banks from 7 in the first phase to 9, and introducing real transaction tests. This plan utilizes a wholesale CBDC as a settlement asset between financial institutions, with commercial banks issuing deposit tokens for consumers and merchants to conduct daily payments.

Officials from the Bank of Korea stated that the second phase will provide institutional CBDC infrastructure, while each bank will be responsible for utilizing deposit tokens to expand their own business, laying the groundwork for future commercialization.

Compared to the first phase, which focused on payment infrastructure verification, the new tests starting in September will be closer to everyday financial scenarios, observing whether the digital won can support cross-bank, cross-merchant, and public fund distribution needs.

Nine Major Banks Participating, Up to 500,000 Users Can Use Deposit Tokens

The second phase adds Kyongnam Bank and iM Bank, bringing the total number of participating banks to 9. Existing participants include KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Financial Group, among other major financial institutions in South Korea. These banks will issue and manage deposit tokens on the central bank's infrastructure, allowing users to utilize the digital won through bank wallets or related payment interfaces.

According to reports, the user cap for the second phase of testing will expand to 500,000, significantly higher than the first phase. The first phase of Project Hangang took place from April to June 2025, with approximately 81,000 people opening wallets, completing about 114,900 transactions, and around 12,000 merchants participating. However, the actual usage rate remains limited, with foreign media noting that about 42% of account holders in the first phase made purchases, prompting the second phase to emphasize practical functions and high-frequency payment scenarios.

New Features Include P2P Transfers and Biometric Identification, Government Subsidies to be Tested on Blockchain for the First Time

The second phase will introduce several features closer to banking services, including person-to-person transfers, biometric payment, automatic top-ups, scheduled automatic payments, cash receipt generation, and interest payments. If users have insufficient deposit token balances in their accounts, the system can automatically transfer funds from linked bank accounts, enhancing the convenience of daily payments.

More notably, the Bank of Korea will test the issuance of government subsidies using programmable deposit tokens for the first time. This means that government funds can be directly distributed to designated recipients via digital wallets, designed to support usage restrictions, distribution conditions, and transaction tracking. If the tests are successful, future social welfare subsidies, local revitalization vouchers, or specific policy funds may circulate in a more timely, cost-effective, and auditable manner.

Digital Won and Stablecoins to Coexist, Accelerating Financial Digitalization in South Korea

The design of Project Hangang lies between central bank CBDC and bank deposit tokens. The general public will not directly hold the wholesale CBDC issued by the central bank but will use deposit tokens issued by commercial banks for payments; the central bank CBDC will play a role in settlement at the backend of financial institutions.

Kim Dong-seop, head of the Bank of Korea's digital currency planning team, described this framework as a compromise between CBDC and stablecoins.

While promoting CBDC, local banks are also laying out the infrastructure for won stablecoins. Hana Bank has begun designing the issuance, redemption, settlement, digital wallet, and anti-money laundering systems needed to support won stablecoins in the future. The South Korean government also plans to update the National Asset Law, which has been in place for 70 years, to include cryptocurrencies in the classification of national assets. The simultaneous advancement of CBDC, deposit tokens, and won stablecoins indicates that South Korea is integrating digital currency into its financial infrastructure upgrade project.