South Korea is launching a pilot project called “Project Han River,” allowing 100,000 residents to use digital currency for payments from April 1 to June 30. The Bank of Korea will issue tokenized deposits through major banks, enabling eligible users aged 19 or older to make purchases at various local stores and online platforms. Each participant can hold up to 1 million won (about $680) in digital tokens, with a maximum of 5 million won during the pilot. This initiative aims to explore digital currency’s benefits, such as instant payments and lower transaction fees, while building a secure infrastructure for future financial technology innovations. Registration opens soon for those interested in joining the trial.
100,000 People to Test Digital Currency Payments in South Korea
South Korea is gearing up to launch a national pilot project named “Project Han River” aimed at exploring digital currency payments. Set to run from April to June, this initiative is part of the country’s efforts to adapt to the fast-changing payment landscape.
According to the Bank of Korea, the central bank will provide digital currency to selected local banks. These banks will offer tokenized deposits to 100,000 individuals who will use these digital tokens to buy goods and services over a three-month period.
Participating Banks and Users
Five major banks — Kookmin, Shinhan, Hana, Woori, and NongHyup — will each enroll 16,000 users. Meanwhile, Industrial Bank of Korea and Busan Bank will each select 8,000 participants. The pilot program is open to Korean residents aged 19 or older with savings accounts at these banks, and registration opens soon.
How Digital Currency Works
Users will be able to convert their savings into tokenized deposits starting April 1. Each participant can hold up to 1 million won (approximately $680) at any given time, with a total limit of 5 million won for the entire testing phase. Payments can be made by scanning QR codes, enabling transactions both online and at local stores, supermarkets, and delivery services.
Benefits of Digital Currency
Kim Dong-sup, head of the Bank of Korea’s digital currency strategy, mentioned that the user experience will be similar to existing mobile payment methods, making it convenient for participants. The digital currency offers quick payment settlements and lower commission fees, enhancing liquidity for vendors since card issuers are not involved.
Future Applications
While technically a central bank digital currency (CBDC), this project focuses on tokenized deposits rather than retail CBDCs. Kim emphasized that the pilot aims to create a technological infrastructure for banks while maintaining the advantages of tokenized assets.
The results from this pilot will help financial regulators evaluate real-world applications for digital currency and its potential for programmable payments. These features may allow for specific spending restrictions, making it a tool for public institutions and charities.
With Project Han River, South Korea is stepping into the future of finance, allowing users to experiment with digital payments in a secure environment. This pilot could reshape how people and businesses interact, paving the way for broader adoption of digital currencies.
What is the BOK digital currency pilot?
The Bank of Korea (BOK) is testing a digital currency to see how it can be used in real-life situations. This pilot program is part of their effort to understand how a digital version of money might work for people and businesses.
Why is BOK launching a digital currency?
BOK believes a digital currency can make payments easier, reduce costs, and enhance security. They want to explore how it can help the economy and keep up with the changes in technology.
How will the pilot program work?
The pilot will involve a select group of users who will conduct transactions using the digital currency. BOK will monitor how people use it and look for any issues that might come up during the testing.
What are the benefits of using a digital currency?
Digital currencies can make transactions faster and cheaper. They also reduce the need for cash, making payments more convenient. Plus, they can improve tracking for safety and reduce fraud.
When will the results of the pilot be available?
BOK plans to share the results after the pilot has completed. They want to ensure they gather enough information to make informed decisions about the future of digital currency in South Korea.