Bank of Korea escalates CBDC pilot (Project Hangang) to Phase 2 with 500,000 users and real government money after Phase 1 opened 81,000 wallets.
DeFi & Yields ·
The Bank of Korea will expand its CBDC pilot, Project Hangang, to Phase 2 beginning in September, scaling from seven to nine participating banks and raising the participant cap to 500,000 users. Phase 1, which ran April through June 2025, enrolled 81,000 wallet holders but saw only 42% actually conduct transactions, generating 114,880 total transactions across 12,000 merchants. Phase 2 marks a significant shift by introducing real government subsidy disbursements alongside new consumer features.
The expansion adds biometric payment authentication, person-to-person transfers, automatic top-ups from linked accounts, and recurring auto-payments. The pilot will test programmable deposit tokens—blockchain versions of money already held in bank accounts—with embedded spending rules that lock funds to specific purposes, vendors, and time windows. A Bank of Korea official stated the phase aims to "lay the groundwork for commercialization." Two additional banks, Gyeongnam Bank and iM Bank, join the original seven, and the pilot will operate without a fixed end date.
The architecture involves the central bank issuing a wholesale CBDC for interbank settlement, with commercial banks creating consumer-facing deposit tokens. Whether this model can reduce interchange fees for merchants and streamline government benefit distribution remains to be demonstrated across the larger user base. The implications for government control over spending behavior through programmable tokens—particularly for subsidized funds—have not yet been evaluated in practice.