The Bank of Korea (BOK) is preparing to launch the second phase of its central bank digital currency (CBDC) pilot, Project Hangang, in September, marking another step toward modernizing the country's digital payment infrastructure. The expanded program will increase participation from seven to nine commercial banks, with Kyongnam Bank and iM Bank joining the initiative.
The original participants included KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH Nonghyup Bank, IBK Industrial Bank of Korea, and Busan Bank. According to local reports, all participating institutions are now completing system upgrades and onboarding users ahead of the expected September launch.
Unlike retail CBDCs that are issued directly to consumers, Project Hangang focuses on wholesale CBDC infrastructure. Under the model, the Bank of Korea provides the settlement layer, while commercial banks issue deposit tokens-digital versions of ordinary bank deposits that settle transactions using distributed ledger technology.
Pilot Introduces New Features and Higher Wallet Limits
The second phase significantly expands the capabilities of the pilot program. Participants will gain access to peer-to-peer wallet transfers, while deposit token wallets will support much larger balances than during the initial trial.
Individual wallet limits will increase from 1 million won to 10 million won, while cumulative holding limits will rise dramatically from 5 million won to 100 million won. At the same time, the number of participants is expected to grow from approximately 100,000 users to as many as 500,000, greatly expanding the scope of the live testing environment.
The new stage also introduces biometric authentication, automated deposit token functions, and broader participation from merchants working with the partner banks. These additions are designed to move the project beyond technical testing and toward practical commercial applications.
Focus Shifts Toward Commercial Adoption
The first phase of Project Hangang, which ran from April to June 2025, focused primarily on testing payment infrastructure. During that period, roughly 81,000 participants completed 114,880 deposit token transactions, while only selected merchants from each business sector participated in the trial.
The upcoming phase will place much greater emphasis on real-world commercialization by allowing banks to onboard their own business partners and expand everyday payment use cases.
Another important feature of the expanded pilot will be the distribution of government subsidies using deposit tokens. The first demonstration will involve the Ministry of Climate, Energy, and Environment's electric vehicle charging subsidy program, replacing part of the existing cash-based subsidy system with blockchain-based payments.
Stablecoin Rules Continue to Advance
Project Hangang is developing alongside South Korea's broader digital asset reforms. The government continues working on the Digital Asset Basic Act, legislation intended to establish legal frameworks for won-backed stablecoins and strengthen the country's digital financial ecosystem.
The proposal would officially recognize won-backed stablecoins as a separate issuance category while allowing foreign users to hold won-denominated accounts abroad and conduct transactions using the Korean currency, improving international payment efficiency.
According to the Bank for International Settlements, the South Korean won accounted for 1.8% of global foreign exchange trading as of the end of last year, ranking 12th worldwide. Officials believe the currency's international role remains below the country's economic standing and see blockchain-based payment infrastructure, stablecoins, and wholesale CBDCs as important tools for expanding the won's global usage.
Together, Project Hangang and South Korea's stablecoin legislation demonstrate the country's commitment to building a modern digital financial system that combines central bank infrastructure, commercial banking innovation, and blockchain technology.
