The Central Bank of Korea will launch the second phase of the “Hanjiang Project” in September, expanding the scope of the Central Bank's digital currency-related pilot. The new phase will increase the number of participating banks to nine, the user ceiling to 500,000 and, for the first time, the introduction of real government subsidy scenarios.
Phase 1 has limited activity
The first phase took place between April and June 2025. The Central Bank of Korea then joined 7 banks and 12,000 merchants to test their deposits for payment, opening 81,000 wallets and completing 114,880 transactions. However, the share of wallets actually consumed is only about 42 per cent, indicating that user activity remains limited.
Add more payments to phase two
In order to increase usage, the Central Bank of Korea added, in the second phase, functions closer to day-to-day banking services, including biometric payments such as fingerprints, transfer of wallets between individuals, automatic filling, periodic automated payments, cash receipts generation and interest payments.
The tiered structure was still used for this test. The Central Bank of Korea issues wholesale CBDCs, which are used only for back-office settlements between financial institutions, and for consumers and businesses, which are bank deposits based on the system. The head of the Central Bank of Korea Digital Monetary Planning Team said that the design was between the traditional CBDC and the stabilization currency.
First test of government subsidy uplink
The second phase will also test government subsidies for the first time through programmable deposit tokens. The relevant tokens are intended for use, the scope of the business and the duration of their use, and are used to limit the use of the subsidized funds.
For ordinary users, this means that in the future a partial subsidy may go directly into a digital wallet. For businesses, one of the priorities of the testing was whether such payments could reduce the fees charged by the banking card network, particularly for high-frequency traders.
Number of participating banks increased to 9
The new participating institutions are Gyeongnam Bank and iM Bank. The seven banks that had previously been involved included the Bank of Nationals, the Bank of New Korea, the Bank of Hanya, the Bank of Friends, the Bank of Agriculture, the Bank of Small and Medium Enterprises of Korea and the Bank of BNK Busan. Unlike the first phase, there is no fixed end date for the second phase.
The new President of the Central Bank of Korea, Shin Xin Soon-soon, has made the Han River Project one of his priorities since his appointment. At the same time, Hanya Bank is moving forward with the design of a system to stabilize the Korean dollar. Seoul's discussion of stabilization currency legislation has been warming since mid-2025.
At the international level, the programmable character of CBDC remains controversial. Proponents argued that this would help to increase the efficiency of subsidies and reduce fraud, while critics feared that financial use restrictions, maturities and wallet freezes might extend public sector control over payments.