South Korea Pays Gov Expenses with Blockchain Pilot
Nine regulatory sandboxes approved for digital treasury payments. Six major banks participate in the QR code settlement system.
Key points
- South Korea approves a blockchain pilot for government operating expenses, replacing physical cards with QR code payments.
- Six major banks join the system to enable immediate settlement and reduce commission fees for small businesses.
- The regulatory sandbox also allows digital notices for urban redevelopment projects, bypassing mandatory postal mail.
South Korea replaces physical cards with blockchain digital currency for government operating expenses. The Ministry of Science and ICT approved this pilot for nine regulatory sandbox cases. Public officials will now scan QR codes to settle business promotion funds immediately.
The move bypasses the National Treasury Fund Management Act restrictions on payment methods. Previously, only government procurement cards or account transfers were permitted for these specific expenses. This regulatory exemption allows digital currency transactions for the first time in this sector.
Six Banks Join Settlement Network
KB Kookmin, NH Nonghyup, Shinhan, Woori, IBK, and Hana banks participate in the pilot. The system processes payments on a blockchain ledger for immediate settlement. This removes the delay inherent in traditional interbank transfers and reduces commission fees for merchants.
Pre-designated prohibited items are blocked by the system to ensure compliance. Transparency improves because expenditure destinations are easier to verify on the distributed ledger. Small business owners benefit from faster receipt of funds without waiting for card settlements.
Digital Notices Replace Postal Mail
The committee also approved digital notifications for urban redevelopment projects. Electronic documents can now replace registered mail for founding association notices. This change streamlines communication with consenting members during the pilot period.
KT received an exemption to send mobile invoices via its certified relay service. MediaScope's open song booths transitioned to a temporary permit status. The Ministry of Culture, Sports and Tourism continues reviewing legal revisions for these services.
Regulatory Sandbox Expansion Details
The 45th ICT Regulatory Sandbox Deliberation Committee held its meeting on the 21st. The Ministry of Science and ICT announced the designation on the 22nd. These approvals signal a broader shift toward digital infrastructure in public administration.
According to chosun.com, the pilot focuses on reducing administrative burdens. The system aims to enhance the efficiency of national treasury fund execution. Future legal frameworks may incorporate these blockchain-based payment methods permanently.
