South Korea President Lee Directs Expedited CBDC Subsidy Pilot Program

South Korean President Lee Jae-myung on the 15th directed the Ministry of Economy and Finance to expedite a pilot program using central bank digital currency for government subsidy payments. The directive came during a departmental briefing at the Blue House Yeongbingwan for the 2026 second half, where Deputy Prime Minister and Finance Minister Koo Yoon-chul presented the initiative aimed at preventing fraudulent receipt of government funds. The program leverages blockchain technology to track subsidy disbursements through the Bank of Korea's institutional CBDC infrastructure, with commercial banks issuing deposit tokens for subsidy payments and settlements.

Bank of Korea CBDC Infrastructure Powers Subsidy Pilot Program

The government subsidy CBDC program operates on institutional CBDC infrastructure issued by the Bank of Korea. Commercial banks issue deposit tokens on this infrastructure, which are then applied to government subsidy payments and settlements. Deputy Prime Minister Koo Yoon-chul stated during the briefing that "we are innovating in relation to fraudulent receipts" and explained that the pilot program "gives (government funds) as CBDC with embedded attributes."

The program aims to prevent fraudulent subsidy receipts and enable tracking of fund disbursement through blockchain technology. President Lee described the mechanism as "providing subsidies through digital currency, which means we can track the entire flow of those amounts."

President Lee Orders Faster Implementation of Digital Subsidy System

Following the Ministry of Economy and Finance's presentation on the 15th, President Lee Jae-myung praised the initiative and issued a directive for accelerated implementation. "You did well, and quickly try to see how it actually works," the president stated during the briefing session.

The directive came after discussions about fraudulent subsidy receipts during the departmental report. The Ministry of Economy and Finance is currently conducting the pilot program with the embedded-attribute CBDC subsidy payment system.

FAQ

What did South Korea's President Lee direct on the 15th regarding CBDC?

President Lee Jae-myung directed the Ministry of Economy and Finance to expedite a pilot program that uses central bank digital currency for government subsidy payments. The directive was issued during a departmental briefing at the Blue House Yeongbingwan for the 2026 second half.

How does South Korea's CBDC subsidy program work?

The program operates on the Bank of Korea's institutional CBDC infrastructure, where commercial banks issue deposit tokens that are applied to government subsidy payments and settlements. The system embeds attributes into the CBDC to enable tracking of fund flows and prevent fraudulent receipts through blockchain technology.