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South Korea could begin the second phase of its Project Hangang digital currency pilot as early as September, expanding tests of bank-issued deposit tokens beyond basic retail payments.
The Bank of Korea and participating lenders are completing system development and user recruitment. The launch still depends on those preparations finishing on schedule.
Nine Banks Will Test Transfers and Biometrics
The second phase will expand the participating group from seven banks to nine. Kyongnam Bank and iM Bank will join KB Kookmin, Shinhan, Hana, Woori, NH NongHyup, Industrial Bank of Korea and Busan Bank.
Planned functions include person-to-person transfers, biometric authentication and automatic deposit token deposits and withdrawals. Banks will also be able to add merchants with which they have direct partnership agreements, expanding the limited retail network used during the first real-transaction pilot.
Bank-Issued Tokens Remain Separate From CBDC
Project Hangang does not give consumers direct access to central bank money. The Bank of Korea issues a wholesale CBDC for participating financial institutions, while commercial banks create deposit tokens backed by customer deposits for use through banking applications.
That structure keeps the consumer-facing product inside the banking system while using central bank infrastructure for institutional settlement.
Phase Two Links Tokens to Bank Account Systems
The next stage will test whether deposit tokens can operate continuously inside existing banking infrastructure rather than through separate experimental wallets.
Banks are building connections between Project Hangang and systems handling customer accounts, transfers, transaction records, accounting and interest calculations.
The aim is to record token activity through ordinary banking systems rather than separate pilot wallets.
First Pilot Logged 114,880 Payments
The first real-transaction pilot ran from April through June 2025. About 81,000 wallets were opened, and users completed 114,880 deposit token transactions at selected online and physical merchants.
That trial focused on whether the payment infrastructure worked under real conditions before banks attempted deeper integration with account and settlement systems.
Subsidy Test Targets EV Charging Projects
Authorities also plan to test deposit tokens for government subsidy payments. The first proposed use involves funding for electric vehicle charging facilities, with part of the subsidy delivered through a programmable token rather than a conventional bank transfer.
Conditions could restrict where funds are spent and when they expire, allowing agencies to track payments and reduce improper claims. A separate test involving public-sector operating expenses is also being prepared.
September Start Depends on Final Onboarding
The second phase may continue without a fixed end date as individual banks develop their own deposit token services on the central bank infrastructure.
A September start will depend on final technical work, merchant onboarding and participant recruitment.
The next signal will be whether the Bank of Korea and participating banks confirm the operational start date for phase two.
