South Korea's central bank is scaling up its digital currency experiment. Project Hangang, the Bank of Korea's CBDC pilot, has entered a second phase that will involve moving real government money — a significant step beyond the test funds used in the first phase.
Phase 1 by the numbers
Phase 1 of Project Hangang opened 81,000 wallets. Of those, 42% of users actively used the CBDC. That's a solid engagement rate for a pilot, though the central bank hasn't said much about what kinds of transactions people made or how often they used the digital won.
The first phase was essentially a dress rehearsal. It used test funds — not real money — so participants could get a feel for the digital currency without any financial risk. The Bank of Korea likely used the data to see what worked and what didn't before moving to the next stage.
Scaling up with real money
Phase 2 is bigger in scale. More importantly, it involves real government money. That changes the stakes. Now the central bank has to ensure the system is secure, reliable, and able to handle actual financial transactions without glitches or errors.
Moving real money means the pilot will test how the CBDC integrates with existing payment systems, how it handles settlement, and how it performs under real-world conditions. The Bank of Korea hasn't released details on how many wallets will be opened in Phase 2 or how much money will flow through the system. But the shift from test funds to real government money signals confidence in the technology.
Other central banks are watching. South Korea's approach — a phased pilot that starts small and scales up — is similar to what the People's Bank of China did with its digital yuan. But the Bank of Korea isn't rushing. It's taking the time to test before any full-scale launch.
The Bank of Korea hasn't set a timeline for a public rollout of a digital won. Phase 2 will likely run for several months, giving the central bank enough data to assess whether a CBDC is viable for the broader economy.
There are still open questions. How will the CBDC affect commercial banks? Will it replace cash or just supplement it? And how will the central bank handle privacy concerns? The pilot doesn't answer those yet. But the move to real money is a signal that the Bank of Korea is serious about making this work.
