“Two Americanos, paid with digital currency, please.”
Starting April 1st, the Bank of Korea (BOK) is initiating a three-month pilot program titled “Project Hangang” to test the practical use of central bank digital currency (CBDC) in everyday retail transactions. Up to 100,000 Korean citizens are expected to participate in the trial, which runs through June 30th.
Seven major banks—KB Kookmin, Shinhan, Hana, Woori, Nonghyup, IBK, and BNK Busan—are taking part in the experiment. Participants will open a digital wallet through their bank’s app and convert funds from their regular deposit accounts into “deposit tokens,” a form of digital currency. The individual holding limit is ₩1 million, with a total conversion cap of ₩5 million during the test period.
Deposit tokens can be used at designated offline merchants like Kyobo Bookstore, 7-Eleven, Ediya Coffee, and Nonghyup Hanaro Mart, as well as online platforms such as Hyundai Home Shopping, Mode House, and the food delivery app “Ttaenggyeoyo.” Payments are made via QR code and, unlike traditional card payments, merchants receive funds instantly with no transaction fees—potentially easing liquidity and fee burdens for small businesses.
Beyond consumer purchases, the pilot is tied to public-sector digital voucher programs. These include Seoul’s Youth Culture Pass, educational supply vouchers in Daegu, and university vouchers at Silla University in Busan. The program aims to demonstrate how programmable money can enforce usage conditions, like restricting funds for educational purposes or local spending.
Kim Dong-seop, Director of the BOK’s Digital Currency Planning Team, stated, “While the difference may not be immediately apparent to consumers compared to existing mobile payments, the trial is meaningful in that it tests future digital currency infrastructure and gathers user feedback for improvement.”
Regulators plan to assess the pilot’s outcomes to shape future CBDC policy and expansion. With Korea now stepping firmly into the realm of digital currency, the deposit token pilot may represent a key milestone in next-generation financial innovation.
