- The Bank of Korea may begin the second phase of Project Hangang as early as September 2026 with nine participating banks.
- The central bank will provide the wholesale CBDC settlement layer, while commercial banks issue deposit tokens linked to customer deposits.
- The expanded trial is expected to test peer-to-peer transfers, biometric authentication, automated token functions and digital subsidy payments.
The Bank of Korea is preparing to move its Korea CBDC initiative into a broader second phase that could begin as early as September 2026. The next stage of Project Hangang is expected to expand participation from seven banks to nine and introduce more practical uses for bank-issued deposit tokens. Under the project’s two-tier structure, the central bank supplies a blockchain-based wholesale CBDC that banks use as a settlement asset, while participating lenders issue deposit tokens to customers. The planned expansion is designed to test how tokenized money can work within existing banking systems and support everyday transactions. It also moves the project closer to commercialization by adding payment, authentication and public-fund use cases that were not available during the first phase.
Korea CBDC testing advances to phase two
The second phase may begin as early as September if the Bank of Korea and participating lenders complete their system development and user recruitment on schedule. Unlike the first stage, which focused mainly on establishing and testing the payment infrastructure, the new phase is expected to examine broader real-world functions. These include direct transfers between users, biometric authentication and automated deposit-token features intended to make transactions more practical.
Project Hangang is based on a layered model rather than a retail CBDC issued directly to consumers. The Bank of Korea issues a wholesale digital currency that serves as the settlement asset between financial institutions. Commercial banks then issue deposit tokens backed by customer deposits and make them available through digital wallets. This Korea CBDC structure allows the central bank to maintain the institutional settlement layer while banks continue managing customer-facing services and compliance.
Nine banks join the Korea CBDC pilot
The participant group will expand from seven banks to nine with the addition of BNK Kyongnam Bank and iM Bank. The seven lenders already involved are KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH Nonghyup Bank, Industrial Bank of Korea and Busan Bank. The broader group gives regional and nationwide lenders a role in testing how deposit tokens can operate across different banking systems and customer networks.
The Korea CBDC expansion also increases the technical and operational scope of the project. Each lender must connect its existing account infrastructure with token wallets, transaction systems and settlement processes. The larger group should provide the Bank of Korea with more information about interoperability, user experience and the challenges of coordinating a digital-money platform across several commercial banks rather than testing it through a limited institutional network.
Deposit tokens support real-world transactions
The first phase of the Korea CBDC initiative ran from April to June 2025 and involved about 81,000 participants, who completed approximately 114,880 transactions using deposit tokens. That stage concentrated on basic payment infrastructure and allowed consumers to convert bank deposits into tokens for purchases. The results gave participating institutions an initial view of how customers interact with tokenized deposits in controlled retail settings.
The second phase is expected to introduce more advanced uses, including peer-to-peer transfers, biometric verification and automated deposit-token functions. Reports also indicate that the project will test the distribution of government subsidies or policy funds through tokenized deposits and digital vouchers. These additions would extend the system beyond merchant payments and help officials assess whether programmable bank money can support public-sector disbursements and other targeted financial services.
Korea CBDC develops alongside stablecoin work
South Korean banks are also preparing infrastructure for possible won-backed stablecoins. Hana Bank, one of the nine Project Hangang participants, has begun designing internal systems for issuance, distribution, redemption, settlement and anti-money laundering controls. The bank has not committed to launching a stablecoin, but its preparations show that major lenders are building technical capacity while lawmakers continue debating the future regulatory framework.
The two developments are related but use different structures. Korea CBDC testing relies on central bank money at the institutional settlement layer and deposit tokens issued by regulated commercial banks. A privately issued stablecoin would depend on a separate legal and reserve framework. Bank of Korea Governor Shin Hyun-song, who took office in April 2026, has emphasized CBDCs and deposit tokens as priorities while South Korea continues discussing how private stablecoins should fit into its broader monetary system.
South Korea broadens its digital asset policies
The Korea CBDC pilot is progressing as South Korea works on other digital-asset measures. The government has proposed a National Asset Basic Act that would modernize the country’s decades-old state asset framework and expand it to cover virtual assets, intellectual property and other forms of intangible value. The proposal remains separate from legislation intended to regulate private crypto businesses and stablecoin issuers.
Internationally, the project forms part of a wider shift toward central bank digital currency research. The Atlantic Council’s tracker, last updated in May 2026, says 146 countries and currency unions are exploring a CBDC, while 77 are in an advanced phase covering development, pilots or launches. It records 41 active pilot projects and three fully launched CBDCs in the Bahamas, Jamaica and Nigeria.
Conclusion
The Bank of Korea may begin the second phase of its Korea CBDC pilot as early as September 2026, expanding Project Hangang from seven participating banks to nine. BNK Kyongnam Bank and iM Bank will join the original lenders as the project moves beyond basic payment testing and adds peer-to-peer transfers, biometric authentication, automated token functions and digital subsidy use cases. The central bank will continue providing the wholesale CBDC settlement layer, while commercial banks issue and manage deposit tokens connected to customer accounts. This structure allows the project to test tokenized money without replacing the role of regulated banks. The next phase could therefore provide important evidence about commercialization, interoperability and the practical use of digital won infrastructure across South Korea’s financial system.
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