LG CNS to lead next phase of Bank of Korea’s digital currency initiative

LG CNS headquarters in Seoul / Courtesy of LG CNS

LG CNS, the IT services arm of LG Group, said it will serve as the lead contractor for the second phase of the Bank of Korea’s pilot program for institutional digital currency and deposit tokens.

The program, Project Hangang, a joint initiative involving the Bank of Korea, the government and the banking sector, is designed to assess whether deposit tokens — bank deposits converted into tokenized form — can serve as both a new payment method and an efficient tool for public fund disbursement.

A central feature of the second phase is a plan to use deposit tokens to disburse government subsidies, which the company described as a world first for public finance.

As part of a plan under review and set for launch in the first half of the year, subsidies for electric vehicle charging infrastructure projects will be paid in deposit token form. The entire process, from disbursement to final settlement, would be recorded on a blockchain in real time, improving transparency.

Digital vouchers built on deposit tokens can also be programmed in advance with restrictions on purpose, time period and spending amount, enabling more targeted use of public funds.

On the consumer side, LG CNS said it completed development of new features, including biometric authentication, peer-to-peer transfers and automated deposit token transactions ahead of the second phase.

BNK Kyongnam Bank and iM Bank have joined the existing lineup of seven participating banks, which includes KB Kookmin, Shinhan, Woori, Hana, IBK Industrial, NH NongHyup and BNK Busan.

Consumers will be able to convert deposits into tokens and pay via QR code at designated online and offline merchants, with the company saying it plans to expand acceptance to convenience stores, supermarkets, cafes and bookstores.

This article was published with the assistance of generative AI and edited by The Korea Times.