The Bank of Korea is preparing to launch the second phase of its central bank digital currency (CBDC) pilot, bringing deposit tokens closer to commercial use while lawmakers continue debating a won-backed stablecoin.
According to the central bank, system development and participant recruitment are in their final stages. If preparations remain on schedule, real-world transactions under Phase 2 of Project Hangang could begin as early as September.
South Korea’s central bank CBDC pilot; the second phase of the Hangang project is expected to launch as early as September
The second phase of Korea’s central bank digital currency (CBDC) pilot project, “Project Hangang,” is about to launch. Banks and commercial banks in
— Telbloggram (@Telbloggram) July 20, 2026
Project Hangang tests a payment model in which the Bank of Korea issues a wholesale CBDC while commercial banks issue blockchain-based deposit tokens for consumer payments. During the first phase, conducted between April and June last year, more than 81,000 participants completed 114,880 transactions using deposit tokens.
The second phase expands participation from seven to nine banks with the addition of Gyeongnam Bank and iM Bank. New features include peer-to-peer transfers, biometric authentication, automatic deposit and withdrawal of deposit tokens, and government subsidy payments using programmable digital money.
Can deposit tokens solve problems that existing digital payments cannot?
South Korea already has one of the world’s most advanced digital payment systems, so the pilot is not designed to replace credit cards or mobile banking. Instead, it is testing whether programmable money can perform tasks that conventional payment systems cannot. The Bank of Korea has described deposit tokens as a way to combine the convenience of bank deposits with the programmability of blockchain-based payments.
Government subsidies distributed through deposit tokens, for example, can be programmed to reach only approved recipients, be spent for a specific purpose, or expire after a set period. That could reduce fraud, limit misuse of public funds, and simplify auditing through blockchain-based records. Similar programmable payment features are also being explored in central bank digital currency (CBDC) projects led by the Bank for International Settlements (BIS) and several central banks.
The same technology could eventually support corporate payments, securities settlement, and tokenized government bonds, which South Korea’s Ministry of Economy and Finance plans to pilot next year.
Crypto users debate what the new CBDC features really mean
The announcement sparked debate across the crypto community, particularly over the addition of peer-to-peer transfers.
Some users welcomed the changes, arguing they bring digital money closer to everyday use. One commenter wrote,
“Everything is heading toward full digitization. Crypto bros aren’t ready for this level of state competition.”
Others questioned whether central bank-controlled transfers contradict crypto’s original purpose. One widely shared response said,
“P2P transfers controlled by a central bank completely miss the point of crypto. Privacy-focused protocols will only become more essential as these roll out.”
The government’s subsidy pilot also raised practical questions. One user asked whether recipients would receive tokenized subsidies directly or simply see the funds appear inside their existing banking apps, highlighting ongoing public curiosity about how CBDC-based payments will function in daily life.
Meanwhile, South Korea’s government plans to introduce the long-awaited Digital Asset Framework Act in the second half of 2026, alongside measures supporting stablecoins, spot Bitcoin exchange-traded funds (ETFs), and blockchain-based financial infrastructure.
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