The Bank of Korea (BOK) is preparing to initiate a pilot program in early April with 100,000 participants to assess its central bank digital currency (CBDC) in real-world transactions.
Known as Project Hangang, this three-month program will run until the end of June and involves collaboration with seven South Korean banks, including KB Kookmin, Shinhan, Hana, Woori, NH NongHyup, BNK Busan Bank, and the Industrial Bank of Korea.
During the pilot, participants will convert funds from conventional bank accounts into digital deposit tokens, which can be utilized for everyday purchases at select merchants through banking apps equipped with QR code payment capabilities. Individuals will be limited to holding up to 1 million won (~$690) in tokens, with a total limit of 5 million won throughout the duration of the pilot.
As reported, participating merchants will include 7-Eleven, Hanaro Mart, Kyobo Bookstore, and Ediya Coffee, as well as online services such as Hyundai Home Shopping. This initiative aims to explore the effectiveness of CBDCs in streamlining payment and settlement processes, potentially lowering transaction fees by facilitating real-time settlements for merchants.
The BOK intends to publicly invite participants for Project Hangang later this month. According to a BOK representative, the pilot seeks to reduce the role of intermediaries in transactions, thereby evaluating the practical advantages of a CBDC model compared to traditional banking systems.
This phase of real-world testing builds on previous CBDC research efforts in South Korea and represents a significant advancement toward the integration of CBDCs into everyday economic activities. The pilot is in line with broader global initiatives led by institutions such as the Bank for International Settlements (BIS), which anticipates widespread adoption of CBDCs in both retail and wholesale sectors by 2030.
This experiment signifies a transition from theoretical modeling to practical implementation, positioning South Korea among an increasing number of countries actively exploring the feasibility of CBDCs for retail applications.
