The Bank of Korea is preparing to launch the second phase of its wholesale central bank digital currency (CBDC) initiative, Project Hangang, as early as September. This next operational stage expands the pilot’s scope by integrating two prominent regional lenders, Kyongnam Bank and iM Bank, bringing the total participating commercial banking cohort from seven to nine institutions.
Project Hangang utilizes a underlying blockchain-based wholesale CBDC issued directly by the central bank to serve as the primary clearing and settlement tier. On top of this infrastructure, participating commercial entities issue tokenized bank deposits that everyday consumers can deploy for routine retail transactions. Following an initial test phase that processed nearly 115,000 transactions across 81,000 users, Phase Two pivots toward commercialization. Key features include testing automated government subsidy disbursements, enabling peer-to-peer (P2P) transfers, integrating biometric authentication, and introducing programmable deposit parameters.
By leveraging tokenized commercial money backed by a wholesale CBDC, South Korea aims to modernize its domestic payments network without disintermediating commercial banks. The upcoming trial will evaluate whether programmable deposit tokens can enhance fiscal delivery mechanisms while maintaining the high settlement speed and security required by modern financial institutions.
