The central bank, the Financial Services Commission and the Financial Supervisory Service are building the required systems and completing regulatory procedures for the next phase of Project Hangang, according to financial industry sources.
Under the project, the BOK issues a blockchain-based wholesale digital currency, which commercial banks use as a settlement asset to issue tokens backed by customer deposits.
The number of participating banks will increase to nine as BNK Kyongnam Bank and iM Bank join the seven lenders involved in the first phase.
The existing participants are KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH Nonghyup Bank, Industrial Bank of Korea and Busan Bank.
Banks plan to simplify the registration process and introduce peer-to-peer transfers, biometric authentication and automatic conversions and withdrawals between conventional deposits and deposit tokens.
They will also expand the number of online and offline merchants accepting the tokens through individual partnership agreements.
Authorities are considering operating the second phase without setting a predetermined closing date.
The trial will remain subject to the financial regulatory sandbox, however, which allows testing for a maximum of four years.
The government also plans to test the use of deposit tokens for subsidies, official operating expenses and other public funds.
Subsidies for the installation of electric-vehicle charging facilities are being considered as the first government payments to be distributed through the system, with a pilot ministry to be selected within this year.
Spending purposes and expiration dates can be programmed directly into the tokens, allowing the government to restrict their use and prevent improper claims.
Authorities plan to expand the experiment to other government expenditures and conduct a separate trial involving tokenized government bonds in 2027.
Project Hangang began after the BOK and financial regulators unveiled a joint plan in October 2023, followed by system development and technical testing before the first live transaction trial ran from April to June 2025.
During the first phase, about 81,000 digital wallets were opened at seven banks, with 114,880 transactions completed and 1.64 billion won converted from bank deposits into tokens.
The trial confirmed that key functions, including token issuance, interbank settlement and programmable digital vouchers, could operate in a live environment, but its limited merchant network and functions made it difficult to assess sustained consumer demand.
Participants cited a wider merchant network, simpler authentication and remittance services as key improvements, prompting the BOK to focus the second phase on convenience and broader practical use.
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