Bank of Korea Archives

Bank of Korea has started the next stage of Project Hangang, its digital won pilot built around wholesale CBDC rails and bank-issued deposit tokens. For people watching digital currency policy, the bigger point is simple: South Korea is no longer only testing retail-style payments. It is now using the system in a real government subsidy case while widening the bank group behind it. Good to Know Project Hangang Phase 2 now includes nine commercial banks, up from seven in the earlier stage. Government subsidy payments are part of the live testing for the first time. Bank of Korea said in February that won-backed stablecoins should start with licensed commercial banks, not open issuance by anyone. South Korea Puts Deposit Tokens Into a Real Use Case A lot of CBDC pilots stop at controlled testing. South Korea is taking a more practical route. In Phase 2 of Project Hangang, Bank of Korea is using deposit tokens tied to a wholesale CBDC structure for two live use cases: government subsidy distribution and broader payment and transfer services. That makes the project more than a lab exercise. It also gives regulators and banks a way to test how a digital won system could work in day-to-day finance. The bank list is bigger now too. Kyongnam Bank and iM Bank joined the original seven lenders: KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup, IBK Industrial, and BNK Busan Bank. Work is being handled with support from the Financial Services Commission and the Financial Supervisory Service. Bank of Korea has tried to keep the language measured. It has described the project as something between a CBDC and stablecoins, not as an instant rollout of a full retail central bank digital currency. For banks, the idea is to test what future rules and future infrastructure might look like before full institutional adoption becomes real policy. In short, the project highlights the following: Nine banks are now involved instead of seven. Deposit tokens are being tested for subsidy payments and consumer transfers. New functions include wallet-to-wallet transfers, automatic top-up, and biometric approval. Broader real transaction testing is planned for the second half of 2026. Not Just One Pilot Phase 1 already showed that the system could run in a live setting, but the earlier stage also exposed weak points. Fewer people joined than invited, and payment volume stayed fairly small compared with the cost of building the rails. Phase 2 looks like an answer to that. Bank of Korea and its partners are now trying to make the system feel more like normal digital payments by adding easier wallet funding, peer-to-peer transfers, and fingerprint-based approval. In plain terms, they want deposit tokens to feel less experimental and more usable. There is also a policy angle sitting behind the pilot. In February, Bank of Korea argued that early issuance of won-backed stablecoins should stay with licensed commercial banks because of money laundering and financial stability concerns. That stance lines up neatly with Project Hangang. South Korea appears to prefer a bank-led digital currency path, where regulated institutions sit in the middle, instead of a looser model led by private crypto firms or fintech issuers. For small merchants and newer tech sectors, the pitch is broader than just digital cash. Reporting around the pilot says follow-up testing in late 2026 will also look at lower payment fees and new infrastructure tied to sectors such as AI-based automatic payments. So when we talk about the digital won, we are also talking about payment settlement, merchant costs, programmable money, and how South Korea wants its future payments stack to work. That makes Project Hangang useful for more than central bank watchers. If you follow CBDC development, stablecoin regulation, tokenized bank deposits, or blockchain payments in Asia, South Korea is giving one of the clearer real-world examples of how those pieces may fit together.

Bank of Korea

Bank of Korea Expands Digital Won Pilot With Nine Banks

Bank of Korea Rejects Bitcoin for Foreign Exchange Reserves

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