South Korea’s CBDC Pilot Phase Two Poised to Overhaul Payment Infrastructure

The Bank of Korea is preparing to launch the second phase of its Project Hangang wholesale CBDC pilot as early as September 2025, expanding participation and introducing new payment functionalities.

Expanding Bank Network and Introducing Novel Payment Features

■Bank of Korea is adding Kyongnam Bank and iM Bank to the existing seven participants, bringing the total to nine.

■The first phase attracted 81,000 users who completed 114,880 transactions using deposit tokens.

■Phase two will test peer‑to‑peer transfers, biometric authentication, and automated deposit token features.

■Government subsidy disbursements will be trialed via tokenized bank deposits.

Wholesale CBDC Model and Commercialization Goals

■The wholesale CBDC operates as a blockchain‑based settlement asset for deposit tokens issued by commercial banks.

■These tokens enable everyday payments for consumers.

■The stage focuses on commercial use and scalability, aiming to automate the distribution of official funds.

Deniz Arel notes that the Bank of Korea’s move to test tokenized deposit instruments for subsidy disbursements and peer‑to‑peer transfers could set a benchmark for other jurisdictions exploring programmable money.