South Korea has initiated a 9.6 billion won project to integrate deposit token payments into commercial transactions, expanding the Bank of Korea’s wholesale central bank digital currency pilot.

The Korea Internet & Security Agency and the Ministry of Science and ICT announced the initiative on July 22. Nine commercial banks, eight payment providers and two major merchants will participate in developing and testing the system.

The project will connect existing payment networks with the central bank’s infrastructure, allowing consumers to use deposit token wallets for payments while merchants retain current point-of-sale terminals. It aims to reduce settlement costs for small businesses and improve transparency through programmable features.

Government agencies plan to apply the technology to public spending and treasury management via the digital public finance platform. Approximately 3 billion won of the budget supports small and medium-sized enterprises and startups in blockchain development.

The effort builds on Project Hangang and aligns with broader plans for won convertibility and stablecoin regulation under the proposed Digital Asset Basic Act. Banks will invest an additional 4.5 billion won in related infrastructure.

The program represents an early step toward commercial use of deposit tokens, distinguishing them from privately issued stablecoins while preparing for wider adoption.