Bank of Korea Scales Up CBDC Pilot with 500K Users
The Bank of Korea will launch Phase 2 of its CBDC pilot in September, expanding to nine banks and 500,000 users. New features include biometric payments and real government subsidy disbursements, aiming at commercialization, as the country also moves to classify cryptocurrencies as national assets.
Quick Take
Phase 2 pilot to include 500K users, nine banks, and real government payouts.
Biometric payments and P2P transfers aim to drive higher engagement.
Programmable deposit tokens could undercut card fees and enable targeted spending.
Expansion comes amid stablecoin design and legal classification of crypto assets.
Market Impact Analysis
BullishPilot expansion and government integration signal growing institutional adoption of blockchain-based payments, potentially boosting market confidence in crypto.
Speculation Analysis
Key Takeaways
- South Korea’s CBDC pilot scales to 500,000 users, adding biometric payments and real government subsidy disbursements.
- Nine banks join Phase 2, up from seven, aiming to reverse weak user engagement from the first test.
- Programmable deposit tokens could slash card interchange fees for merchants and enable targeted subsidy spending.
- The pilot’s architecture straddles CBDC and stablecoin, with Hana Bank designing a won-backed stablecoin.
What Happened
The Bank of Korea will launch Phase 2 of its CBDC pilot in September 2026, expanding to nine banks and up to 500,000 users. The central bank aims to test commercialization after Phase 1 saw only 42% of wallet holders transact. New features include biometric fingerprint approvals, person-to-person transfers, and real government subsidy disbursements using programmable deposit tokens. The pilot marks the first time real government money will move on-chain, with commercial banks issuing blockchain-based deposit tokens backed by the central bank's wholesale CBDC.
The Numbers
Phase 2 caps users at 500,000, a sharp increase from the 81,000 wallets opened in Phase 1. During the first test, only 114,880 transactions were processed, despite banks investing an estimated 30–35 billion won in infrastructure. Nine banks will participate, up from seven, with Hana Bank also designing a won-backed stablecoin. The low 42% engagement rate drove the central bank to add consumer-friendly features like auto top-ups and P2P transfers to boost activity.
Why It Happened
Governor Shin Hyun-song made CBDC commercialization a priority after taking office in April 2026. The Phase 1 pilot revealed tepid user interest, with most wallet holders never making a transaction. To drive adoption, Phase 2 introduces features that mirror real banking: biometric payments, automatic balance top-ups, and recurring payments. The government also sees programmable tokens as a tool to disburse subsidies more efficiently, cutting fraud and administrative costs. For merchants, deposit tokens could undercut the card networks' interchange fees, a key selling point.
Broader Impact
The pilot’s architecture—a wholesale CBDC with commercial bank-issued deposit tokens—blurs the line between CBDCs and stablecoins. It comes as South Korea moves to classify cryptocurrencies as national assets, potentially establishing a framework for private stablecoins. However, programmable money raises privacy concerns, as the central bank could control how and where funds are spent. The outcome may influence pending stablecoin legislation and reshape retail payments.
What to Watch Next
- Pilot engagement metrics: will enhanced features push transaction rates above 50%?
- Merchant adoption: if deposit tokens significantly undercut card fees, it could trigger a payments shift.
- Regulatory response: watch for privacy debates and stablecoin law changes as programmable CBDCs advance.
This article is for informational purposes only and does not constitute financial advice.
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