Bank of Korea Expands CBDC Pilot With Half a Million Users

South Korea’s Bank of Korea ran a three-month central bank currency, or CBDC, pilot last year. Eighty-one thousand people opened their wallets, but only 42% spent anything.

The next phase of the CBDC push begins in September—with nine banks involved, up to 500,000 users spend tokens, with real government money on the line this time.

The central bank announced the expansion of Project Until– Its CBDC (issued by the government, a blockchain version of the winning paper) on Monday, according to a report by Yonhap News Agency. “Starting from the second phase, we will establish a foundation for commercialization,” said the Bank of Korea official Yonhap.

Phase 1 started from April to June 2025 with seven banks and 12,000 merchants making 114,880. According to the review of HRF CBDC trackerall the banks together made 30-35 billion in building the foundation for this.

Part 2 addresses the social and operational problem of real banking. New features include biometric fingerprint acceptance, person-to-person wallet transfers, automatic top-ups (your linked bank account converts money into deposit tokens when the balance runs low), recurring payments, receipt generation, and interest payments.

For the first time, the pilot will also evaluate government funding using potential indicators.

The Bank of Korea is offering CBDC for sale – a digital currency that is used only among financial institutions to settle transactions in the underground, and not directly held by ordinary people. Commercial banks create deposit tokens (money already in your bank account) that consumers and merchants use to make real payments. Kim Dong-seop, head of the bank’s digital currency planning team, it is called design “a middle ground between CBDC and stablecoin.”

For regular users, the infrastructure can mean receiving government benefits directly in a digital wallet instead of waiting for a voucher or check. For small businesses and retailers, the trial will test whether deposit refunds can reduce the transaction fees that networks pay for each transaction — a cost that quickly adds up for high-profile merchants.

Phase 2 will run escrow tokens with operating rules: locked-in funds for approvals, vendors, and time windows, instead of hand-counting paper and trickle down returns.

In other words, the implementation gives the Bank of Korea greater control over how citizens spend government-issued money for specific purposes.

Joining the original seven banks—KB Kookmin, Shinhan, Hana, Woori, Nonghyup, Industrial Bank of Korea, and BNK Busan—are Gyeongnam Bank and iM Bank. The pilot will travel freely and not with a fixed date.

The new governor of the Bank of Korea in South Korea, Shin Hyun-song, made Project Hangang a major part of his first address after taking office in April 2026. Hana Bank, meanwhile, has begun to develop a won-backed stablecoin system—a digital token set privately 1:1 to a Korean winner—before the rules that have become central to it. stablecoin controversy in Seoul starting in mid-2025. The Ministry of Finance and Finance has also announced plans to amend the 76-year-old financial law to include cryptocurrencies as a national currency.

CBDCs, however, are not mutually exclusive. The same arrangement that makes deposit tokens attractive to regulators is what worries critics. Laws that close government funds to other sellers can easily be extended beyond the aid-banks, restrictions on the use of funds, or the closing of the wallet without the permission of the court. Unlike cash, all CBDC funds are placed on a ledger that the central bank and its peers can read.

Human rights organizations have characterized this as a systemic problem with CBDCs as a group, not just the South Korean model. China’s digital yuan has already been issued with expiration dates on other stimulus payments – Beijing frames it as an anti-bankruptcy policy, which critics call economic pressure. Researchers at Laws warned that e-CNY could become a global model for government-controlled financial monitoring. The concerns are the same regardless of who is running the system: pre-arranged funds are funds with linked assets, and these can always be expanded.

Meanwhile, the United States is moving in the opposite direction. The four-year ban on CBDC release it became a law On July 11, the 21st Century ROAD to Housing Act went into effect without President Donald Trump’s signature when a 10-day window for litigation expired, after Trump refused to sign it on grounds of unconstitutional voting rights.