South Korea launches the second phase of its CBDC pilot: 500,000 wallets and 100 million won in operations
The Financial Services Commission of South Korea has officially approved the second phase of the ambitious Hangang project—an experiment with digital payments based on CBDC. As a leading market analyst, I have been closely monitoring this project, and today's news confirms that the regulator intends to scale the infrastructure to a level comparable to commercial payment systems.
The key change is that the limit on user wallets increases from 100,000 to 500,000. It is important to emphasize: the limit is set specifically on the number of wallets, not on the number of unique users. This means one person can have multiple wallets, opening up flexibility for testing various use cases. The second phase could launch as early as September 2025.
Regulator Raises Limits and Expands Functionality
The storage limit per wallet will increase from 1 million to 10 million won, and the total transaction limit from 5 million to 100 million won. For individuals and sole proprietors, clear restrictions are set: up to 1 million won per transaction and up to 5 million won per day. For companies, the limits are significantly higher: 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 and 500 million won, respectively.
The feature set will include transfers between wallets, biometric transaction confirmation, and automatic balance replenishment of deposit tokens. The latter function is particularly interesting: when funds are insufficient, the system automatically converts the required amount from the user's regular bank account. This makes digital payments as seamless as possible.
Nine Banks and a Two-Tier Model
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 Commission has already granted the new participants the status of experimental financial service operators.
As a reminder, the first phase of Project Hangang was conducted from April to June 2025 and showed impressive results: users opened approximately 81,000 wallets and conducted 114,880 transactions. This confirms the high demand for digital payment instruments in South Korea.
The project uses a two-tier model: the Bank of Korea issues a wholesale CBDC for settlements between financial institutions, while commercial banks create deposit tokens based on it—a digital representation of funds in client accounts. Users do not directly own the CBDC; they pay with deposit tokens, which are liabilities of a specific bank.
The second phase will also extend to the execution of certain government expenditures. Smart contracts will allow deposit tokens to be transferred directly to recipients and set conditions for their use. Additionally, a pilot of tokenized government bonds is planned for 2027, with settlements linked to the wholesale CBDC within the Project Hangang infrastructure.
My expert conclusion: South Korea is demonstrating how a CBDC can be integrated into the real economy without direct citizen access to the central bank's digital currency. The two-tier model with deposit tokens is a pragmatic compromise between innovation and financial stability. If the second phase succeeds, South Korea could become the first major economy with a fully functioning retail CBDC infrastructure.