South Korea‘s central bank, the Bank of Korea (BoK), is launching Phase 2 of its central bank digital currency (CBDC) with nine banks participating and a user cap of over 500,000 for live deposit token testing.
BoK’s “Project Hangang,” the phase 2 of South Korea’s CBDC pilot project, is in the final stages of preparation, local news agency Yonhap News reported.
“The Bank of Korea will provide the infrastructure for the institutional CBDC, and each bank will conduct its own business with deposit tokens. [Adding] from the second phase, we will lay the groundwork for commercialization,” a Bank of Korea official told Yonhap.
According to the report, the second phase of the CBDC will take over as early as September if system development and participant recruitment preparations are completed on schedule.
Joining the initial seven banks from the first phase—KB Kookmin, Shinhan, Hana, Woori, Nonghyup, Industrial Bank of Korea, and BNK Busan—are Gyeongnam Bank and iM Bank.
South Korea’s central bank tested its CBDC pilot for three months last year, but user engagement remained limited. While 81,000 participants created digital wallets, the BoK reported that only 42% used them to make purchases.
The CBDC’s first phase was conducted between April and June 2025, involving seven banks and around 12,000 merchants, resulting in a total of 114,880 transactions. The HRC CBDC tracker estimated that participating banks spent roughly KRW 30-35 billion ($20-23 million) to develop the infrastructure needed for the trial.
Phase 2 addresses the CBDC’s engagement problem through features similar to traditional banking. The phase 2 new features include biometric fingerprint approvals, person-to-person wallet transfers, automatic top-ups, recurring autopayments, cash receipt generation, and interest payments.
The second phase of the trial will also allow the testing of government subsidy disbursements via programmable tokens. For consumers, the CBDC would eventually allow government benefits to be sent directly to their digital wallets instead of through vouchers or checks. For small businesses and retailers, it aims to lower payment costs by testing deposit tokens as an alternative to traditional card networks.
During the first phase, the central bank took the lead in securing merchants for the industry. In the second phase, participating banks can include merchants with whom they have signed a memorandum of understanding.
The second phase of the CBDC will introduce programmable deposit tokens with built-in spending restrictions, limiting how the funds can be used. This would also enable the central bank to have greater oversight of government-issued funds.
South Korea’s new BoK Governor, Shin Hyun-song, highlighted Project Hangang on his first policy address after taking office in April.
Project Hangang is designed to test a blockchain-based payment system in which the BoK issues wholesale CBDC, commercial banks issue deposit tokens backed by it, and consumers can use those tokens to complete retail payments.
South Korea’s push toward digital currency innovation
For years now, South Korea has been pursuing the use of digital currencies and stablecoins.
In April 2026, Shin Hyun-song said that one of his priorities as governor of the Bank of Korea is to promote and support CBDCs and tokenized deposits, noting that, “Safeguarding trust in money and the stability of payments and settlements is also the Central Bank’s mission of the era.”
To achieve this, the BoK governor said: “Through Phase two of Project Han River, we will increase the usability of CBDC and deposit tokens, and through international cooperation such as the Agorá Project, we will enhance the won’s standing even in a digital payments environment.”
In more recent news, the government is introducing the National Asset Basic Act to amend the state asset management system.
The South Korean Ministry of Economy and Finance (MOEF) announced on July 15 that the new framework will expand the definition of national assets to include digital assets and intellectual property (IP), modernizing how state-owned assets are managed.
Watch: CBDC Applications Beyond Digital Money
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