South Korea has approved a regulatory sandbox pilot allowing public institutions to pay selected operating and official business expenses with blockchain-based digital currency rather than relying solely on physical government purchase cards. Eligible spending includes promotional and similar expenses incurred by employees in the course of their official duties. Payments will be made by scanning smartphone QR codes, while blockchain-based processing is designed to complete payment and reconciliation at the same time. The Ministry of Science and ICT approved the project at the 45th ICT Regulatory Sandbox Review Committee meeting on Sept. 21 as one of nine cases granted regulatory exemptions, and announced the decision on Sept. 22. The existing pilot framework uses bank-issued deposit tokens and Project Hangang, with six participating banks: KB Kookmin Bank, NH NongHyup Bank, Shinhan Bank, Woori Bank, Industrial Bank of Korea and Hana Bank. The current announcement did not specify which digital currencies would be used in the public-sector rollout or the scale at which implementation would begin. Authorities will monitor how digital-currency payments are used and managed in public spending. Project Hangang’s two-layer structure separates commercial-bank payment instruments from Bank of Korea wholesale central bank digital currency used for interbank settlement, while programmable controls can restrict ineligible expense categories before transactions occur.