South Korea Eyes September for Second Phase of CBDC Pilot

Summary

The Bank of Korea is preparing to launch the second phase of its wholesale central bank digital currency (CBDC) pilot, known as Project Hangang, potentially as early as September. This follow-up stage will expand the pilot's scope by increasing the number of participating banks from seven to nine, with the addition of regional banks Kyongnam Bank and iM Bank. The new phase will also introduce enhanced payment features and experiment with government subsidy payments using tokenized bank deposits.

Project Hangang employs a blockchain-based wholesale CBDC issued by the central bank, which serves as the settlement asset for deposit tokens issued by participating commercial banks. These tokens enable consumers to make everyday payments. The pilot’s first phase, conducted between April and June 2025, involved approximately 81,000 participants who completed a total of 114,880 transactions using the deposit tokens. That initial phase primarily focused on testing payment infrastructure.

Why it matters

In the upcoming second phase, the focus will shift towards exploring potential commercialization. Planned enhancements include peer-to-peer transfers, biometric authentication, and the introduction of new automated features for handling deposit tokens. This progression indicates the Bank of Korea's ongoing commitment to developing its CBDC capabilities and testing real-world applications such as the disbursement of government subsidies through digital means. The project's gradual expansion highlights the central bank's cautious approach to rolling out innovative payment technologies.