South Korea clears Project Hangang Phase 2, expanding CBDC pilot to 500,000 users

Expanded pilot and new participants

The second phase marks a major increase from Phase 1, when the pilot involved about 100,000 users. Under the new designation, the deposit-token trial will extend to roughly 500,000 participants. The project’s user base is also set to broaden beyond its earlier configuration, with expanded use by small business owners and large companies and wider merchant participation.

The FSC said five services in total received innovative financial service status, including Hangang Phase 2. As part of the expanded pilot, BNK Kyongnam Bank and iM Bank were named as providers of deposit-token-based payment and settlement services. The regulator also revised earlier designations for seven banks that took part in the first phase.

New functions in Phase 2

The second-stage trial introduces several operational changes and added features. Among the most notable is wallet-to-wallet transfer capability, which was not part of the earlier phase. The project will also add automatic conversion for deposits and withdrawals, biometric authentication, higher holding and transfer limits, non-face-to-face wallet opening for businesses, and cash receipt issuance.

These additions suggest the authorities want to move the test beyond a narrow retail use case and examine how deposit tokens could function in a broader payments environment. The latest phase is intended to support more practical use across both consumers and businesses while widening the range of transactions that can be processed through the system.

Public-sector and settlement testing

A further area of focus in Phase 2 is the public sector. The FSC said the project will run a pilot for treasury fund disbursements, part of a wider effort to explore how distributed ledger technology-based payment and settlement systems could be used in government-related functions.

The regulator also plans to test whether smart contracts can improve the settlement process. According to the FSC, this includes examining whether such tools can simplify procedures, lower post-verification costs, and help prevent fraudulent claims. Those goals remain part of the testing agenda rather than established outcomes.

Broader context for Hangang

Project Hangang is the Bank of Korea’s CBDC deposit-token initiative, and the latest approval indicates that authorities are continuing to build on the first phase rather than ending the experiment at a limited scale. By increasing the number of users, bringing in additional banks, and adding business and public-sector functions, Phase 2 is set up as a broader test of how deposit-token-based payments and settlement might work in practice under Korean supervision.