South Korea will expand its digital payment pilot to 500,000 wallets - ForkLog

# South Korea will expand the digital payments pilot to 500,000 wallets

The Financial Services Commission of South Korea approved the second phase of Project Hangang—an experiment by the central bank with digital payments based on CBDC. The maximum number of user wallets will be increased from 100,000 to 500,000, and the number of participating banks will rise from seven to nine.

The expanded testing may begin in September, Decrypt reports. The limit applies specifically to wallets, not to the number of unique users. Participants will also not directly hold the CBDC: for payments, they will receive deposit tokens issued by commercial banks.

Regulator increases limits

In the second phase, the storage limit will be raised from 1 million to 10 million won per wallet. The aggregate transaction cap will be increased from 5 million to 100 million won.

Limits on transfers will be set for individuals and self-employed persons:

• up to 1 million won per transaction;
• up to 5 million won per day.

For companies, the limits will depend on the method used for transactions. Via internet banking, transfers of up to 1 billion won per transaction and up to 5 billion won per day will be possible; via a mobile app—up to 100 million and 500 million won, respectively.

The approved set of functions will also include transfers between wallets, biometric confirmation of transactions, and automatic top-ups of deposit token balances. In the latter case, if funds are insufficient, the system will automatically convert the required amount from the user’s ordinary bank account.

For companies, there will be provisions for remote wallet opening and the ability to issue cash receipts. The list of acceptance points will be expanded to include small businesses and large enterprises.

Nine banks will be added to the experiment

Joining the seven banks from the first stage—KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, Nonghyup Bank, Industrial Bank of Korea, and BNK Busan Bank—will be Gyeongnam Bank and iM Bank.

The regulator granted the two new participants the status of experimental financial service operators. For the other seven banks, the regulator adjusted the terms of previously issued approvals in line with the parameters of the second phase.

The first stage of Project Hangang ran from April to June 2025. Users opened about 81,000 wallets and conducted 114,880 transactions.

CBDC will remain at the banking level

Project Hangang uses a two-tier model. The Bank of Korea issues wholesale CBDC for settlement between financial institutions.

Commercial banks, based on this infrastructure, create deposit tokens—digital representations of funds already held in clients’ accounts. Users pay for goods and transfer money using these deposit tokens.

Thus, the deposit token remains a liability of a specific commercial bank, while CBDC is used for final settlement between financial institutions.

The second phase will also be extended to the execution of certain government spending. Smart contracts will allow deposit tokens to be sent directly to recipients and set conditions for their use.

Recall that in July, South Korean authorities planned a pilot of tokenized government bonds for 2027. Settlement for these will be linked to the wholesale CBDC in the Project Hangang infrastructure.