Insights

CBDC Hangang

Apr 24, 2025

In spring 2025, the Bank of Korea launched a groundbreaking pilot program called the 'CBDC Hangang Project' to test Central Bank Digital Currency (CBDC). This isn't just a technical experiment—it's a large-scale trial designed to let citizens experience the future of finance by using digital currency in real-world scenarios. The project aims to simultaneously innovate public services and transform financial infrastructure. Let's explore the details.


Why Do We Need Digital Currency?

Our everyday payment systems are operated by various private companies including banks, card companies, and mobile payment services. This structure often leads to fees, delayed settlements, and complications arising from system complexity.

Government welfare vouchers and policy funds that come with specific usage conditions (when, where, and how they must be spent) are particularly difficult to manage effectively within current systems. During COVID-19, there were cases of fraudulent organizations setting up ghost companies to collect disaster relief funds, and even solar power businesses unaffected by the pandemic receiving support. While the government simplified verification procedures for rapid disbursement, many exploited these vulnerabilities. These incidents highlight the structural limitations of current payment systems, which lack precise control over fund flows and make it difficult to track problems after they occur.

The Bank of Korea aims to address these issues through CBDC with smart contract functionality, working toward a more transparent and efficient payment system.


The Hangang Project: Digital Deposit Tokens in Banking Apps


This experiment runs from April to June 2025 (three months), with participation from seven major banks: KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, Nonghyup Bank, IBK Industrial Bank, and Busan Bank. Each bank has integrated digital wallets into their apps, allowing users to issue and use digital deposit tokens based on their actual bank accounts.


Reference from: Bank of Korea

These deposit tokens are issued by banks but circulate within the Bank of Korea's CBDC system. Built on blockchain technology, the system records transaction information using encrypted addresses, ensuring personal information remains protected. During the trial period, users can hold up to 1 million won in deposit tokens and convert up to 5 million won total.

Payments are made easily via QR codes, usable at participating offline stores (approximately 100 locations, primarily in Busan and Incheon) and over 100,000 online merchants. Sellers benefit from fee-free, real-time settlement, creating advantages for both users and merchants.


More Transparent and Convenient Digital Vouchers


A key component of this project is the "Digital Voucher Program." Vouchers are a way to distribute public budgets for specific purposes and conditions. Instead of complicated paper gift certificates or physical cards that are difficult to manage, the project issues vouchers as digital deposit tokens to solve these problems.


Reference from: Bank of Korea


Seoul City, Daegu City, and Silla University in Busan are participating in the experiment, offering youth cultural support, childcare support for multi-child families, and small business support vouchers for university students. According to the Bank of Korea, Seoul City plans to provide vouchers to young people aged 20-23 with household incomes below 150% of the median income, which can be used for attending fine arts performances such as classical music, theater, and dance. These vouchers automatically set usage conditions through smart contracts and provide real-time settlement upon use.

Digital vouchers simplify and increase transparency in transactions between governments, local authorities, users, and merchants, reducing fraudulent claims while improving administrative efficiency and budget execution certainty.


What Role Does SOOHO.IO Play?


The reliability of smart contracts is central to these digital voucher systems. This is where SOOHO.IO serves as a crucial technical partner.

SOOHO.IO provides core solutions that automatically verify and deploy smart contracts programmed with voucher conditions specifying "who can use them, when, where, and for what purpose." This process goes beyond simple code deployment—it creates essential infrastructure enabling real-time settlement and enhances the overall system's reliability through key technologies.

Based on the technical insights gained from this experiment, SOOHO.IO is researching and developing digital infrastructure that can be utilized in more public policies in the future, laying the groundwork for long-term public digitalization beyond this short-term experiment.


Future Outlook


The CBDC Hangang Project will complete its pilot operations by June 30, 2025, after which the Bank of Korea will comprehensively review user responses, system performance, and areas needing improvement. Based on these results, they will determine how to expand the digital currency system.

The digital voucher program, which has received particular attention in this experiment, could potentially expand to more local governments and various public policies. This trial is expected to demonstrate how condition-based payments and real-time settlement can be practically applied to actual administration.

As a technical partner in this process, SOOHO.IO continues to advance its technology to ensure smart contract-based digital voucher systems can be used more reliably and broadly. The company remains committed to strengthening digital infrastructure foundations and supporting the digital transformation of public policy.


Want to Learn More About SOOHO.IO's Technology?


SOOHO.IO, which developed the foundational technology for the CBDC Hangang Project, aims to continue creating financial innovation through secure and reliable blockchain infrastructure.

If you'd like to know more about SOOHO.IO's technology, please contact us today!


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