South Korea expands digital payments pilot: wallet limit increased to 500,000
South Korea's financial regulator has approved the second phase of the ambitious Hangang project, aimed at testing digital payments based on CBDC. The key change is a significant expansion of the experiment's scale: the maximum number of user wallets will increase from 100,000 to 500,000. Two new banks will also join, raising the total number of participating financial institutions from seven to nine.
The launch of the expanded testing is scheduled for September. It is important to emphasize that the limit of 500,000 refers specifically to wallets, not the number of unique users. Additionally, participants will not directly own CBDC — they will receive deposit tokens issued by commercial banks for settlements. This is a two-tier model: the Bank of Korea issues wholesale CBDC for interbank settlements, while retail banks create tokens backed by funds in customer accounts.
Regulator significantly raises limits
In the second phase, the storage limit per wallet will increase from 1 million won to 10 million won. The cumulative transaction limit will rise from 5 million won to 100 million won. For individuals and sole proprietors, transfer limits are set: up to 1 million won per transaction and up to 5 million won per day. For companies, limits are more flexible: via internet banking — up to 1 billion won per transaction and up to 5 billion won per day, via mobile app — up to 100 million won and 500 million won, respectively.
Features will include wallet-to-wallet transfers, biometric transaction confirmation, and automatic top-up of deposit token balances. If funds are insufficient, the system will automatically convert the required amount from the user's regular account. For businesses, remote wallet opening and cash receipt issuance are provided, and the network of acceptance points will expand through small and large businesses.
Nine banks to join the experiment
The seven banks from the first phase — KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, Nonghyup Bank, Industrial Bank of Korea, and BNK Busan Bank — will be joined by Gyeongnam Bank and iM Bank. The regulator has granted the new participants the status of experimental financial service operators and updated conditions for the others.
To recall, the first phase of Project Hangang ran from April to June 2025. During this time, users opened approximately 81,000 wallets and conducted 114,880 transactions. The second phase will also cover the execution of certain government expenditures — smart contracts will allow deposit tokens to be transferred directly to recipients with specified usage conditions.
South Korean authorities have already planned a pilot of tokenized government bonds for 2027, with settlements linked to wholesale CBDC within the same Project Hangang infrastructure.
My analysis: South Korea is steadily moving toward the implementation of a central bank digital currency, and expanding the pilot is a logical step. The fivefold increase in the number of wallets and the raising of limits indicate the regulator's high confidence in the technology. However, a key challenge remains: deposit tokens are not a full-fledged CBDC, but merely a digital representation of fiat funds, which may limit their adoption in the long term. Nevertheless, this gradual approach reduces risks and gives the market time to adapt.