The Bank of Korea (BoK) is preparing to roll out its central bank digital currency (CBDC) pilot program, Hangang, in April. This initiative aims to evaluate the practicality of CBDCs in real-time transactions, allowing select participants to exchange traditional bank deposits for digital “deposit tokens” to be used at partner merchants, including supermarkets and e-commerce platforms.
The trial is expected to run for approximately three months, with seven major banks—including KB Kookmin, Shinhan, Hana, and Woori—collaborating in the program.
According to the BoK, the pilot will assess the potential of deposit tokens in streamlining financial transactions by enabling instant settlements and reducing transaction costs through the removal of intermediary institutions. The central bank envisions this experiment as a crucial step toward integrating digital currencies into everyday financial systems, possibly paving the way for a broader adoption of CBDCs in South Korea’s economy. A public announcement is expected by the end of the month to recruit eligible participants.
Despite its push for financial innovation, the Bank of Korea has ruled out the possibility of adopting Bitcoin as a reserve asset, citing concerns over price volatility and transaction risks. This decision comes amid growing speculation about North Korea’s increasing Bitcoin holdings, with reports suggesting that the country’s notorious Lazarus Group has amassed significant BTC reserves, surpassing Bhutan and El Salvador in holdings. Meanwhile, South Korea continues to strengthen its anti-money laundering measures to counter crypto-related threats and ensure regulatory compliance in the digital asset space.
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