South Korea CBDC’s pilot will be launching in April 2025, with around 100,000 users getting the chance to test the digital won in real-world transactions. The Bank of Korea (BOK) has just announced this three-month initiative, which they’re calling Project Hangang, and it will be running until June. At the time of writing, this central bank digital currency project represents a really significant step in CBDC adoption as South Korea joins the growing list of other nations that are also exploring digital alternatives to traditional cash.
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Exploring the Digital Won: South Korea’s CBDC Pilot Program Details
The upcoming trial will thoroughly evaluate the viability and performance of a central bank-backed digital currency in actual use. Participants will be able to convert their regular bank deposits into digital tokens for everyday purchases using QR codes, which are already familiar to many Korean consumers.
How the Digital Won Works
For most users, the experience will closely resemble existing mobile payment platforms like Kakao Pay, which are quite popular in the country. Payments will be processed through deposit tokens—a form of digital currency issued by the BOK and converted from money in users’ bank accounts.
A BOK official highlighted some of the potential benefits:
Through deposit token payments, merchants can receive settlement funds in real time. Additionally, related transaction fees are expected to be reduced by minimizing intermediary institutions in the payment process.
The South Korea CBDC pilot also includes certain spending limits that participants will need to follow. Each person will have a deposit token limit of 1 million won (around $689) and a total spending cap of about 5 million won throughout the trial. Users can, however, convert their deposits multiple times as long as they stay within these predetermined limits.
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Participating Institutions
Seven major banks are currently participating in the South Korea CBDC pilot program: KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, IBK, and also BNK Busan. It’s worth noting that participants will need to have an active account with at least one of these banks to be eligible for the program.
Both online platforms and physical retail locations will be set up to accept digital won payments, including well-known names such as Hyundai Home Shopping, 7-Eleven convenience stores, Hanaro Mart supermarkets, Kyobo Bookstore, and Ediya Coffee shops.
Global Context
The Bank of Korea actually began its CBDC research back in 2021 and later joined Project Agora in 2023. This initiative, led by the Bank for International Settlements, is exploring right now how tokenization can enhance and improve cross-border payment systems.
The project involves an international collaboration with central banks from several countries, including France, Japan, Korea, Mexico, Switzerland, England, and the New York Federal Reserve, showing just how global the interest in CBDC development has become.
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Beyond Basic Transactions
The South Korea CBDC pilot is also exploring additional applications that go beyond simple payments. One of the interesting features of the digital won is its programmability, which allows setting specific conditions on when and how transactions can occur.
For example, government subsidies such as childcare support could be distributed as digital vouchers with built-in limits to approved vendors, ensuring that the funds are actually used for their intended purpose. At present, the BOK is actively working with Seoul and Busan local governments to test and refine these kinds of specialized applications.
Future Outlook
The BOK is planning to announce all the public participation details by the end of March. If this initial pilot proves successful, this project could establish a solid foundation for a much wider nationwide CBDC implementation in the future. There’s already a second round of testing scheduled for October-December 2025, which shows the bank’s long-term commitment to the project.
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The South Korea CBDC pilot represents an important shift from theoretical modeling to practical, real-world application. According to recent projections from the Bank for International Settlements, widespread CBDCs will see adoption in both retail and wholesale capacities by around 2030. South Korea clearly positions itself at the forefront of this exciting financial innovation through its comprehensive approach with the current pilot program.