South Korea’s Ministry of Finance and Economy is preparing to implement a system where “deposit tokens” are used to cover certain operational expenses, replacing the standard government card method, The Kyunghyang Shinmun reported Thursday.
This will be tested through a pilot project launching in the fourth quarter of 2026, beginning in Sejong City.
Deposit tokens are a blockchain-based form of digital money that represents actual currency. They differ from typical crypto assets because they are stable and can include built-in rules that control how they are spent.
In the existing framework, spending is reviewed after it happens, requiring explanations for transactions that fall outside normal guidelines. The new approach allows conditions to be set in advance, preventing improper use and ensuring all payments are automatically tracked.
Officials believe this will enhance financial transparency, reduce administrative burdens, and lower transaction fees for businesses by enabling direct payments without third-party processors.
Since current regulations mandate the use of purchasing cards, the initiative is being conducted under a regulatory sandbox that allows temporary exemptions. The project aims to systematically test whether a digital, blockchain-based system can improve how government funds are distributed and managed.
Source: https://cryptobriefing.com/south-korea-plans-ditch-government-cards-in-favor-blockchain-deposit-tokens/
