South Korea’s Financial Services Commission (FSC) approved five innovative financial services on July 15, with the headline item being phase 2 of Project Hangang, the central bank digital currency sandbox led by the Bank of Korea (BoK). The new round expands participating banks from seven to nine and increases wallet capacity from 10,000 accounts to 500,000.
The FSC also approved revisions to seven existing services, bringing the cumulative number of designated innovative financial services to 1,111. ABMedia described the decision as a concrete step that lets the BoK push its CBDC plan forward through the sandbox route while South Korea’s Digital Asset Basic Act, or DABA, remains stuck in the legislature.
Five upgrades in Hangang phase 2
Project Hangang’s move from phase 1 to phase 2 includes five specific changes.
- The number of participating banks rises from seven to nine, with Gyeongnam Bank and iM Bank newly added.
- Wallet capacity jumps 50-fold from 10,000 accounts to 500,000.
- Remittance is added on top of the existing payment function.
- Deposit tokens can be converted automatically to and from bank accounts.
- Biometric authentication is introduced.
Personal holding limits were also raised. A single wallet can hold up to 10 million won in deposit tokens, with cumulative holdings capped at 100 million won.
ABMedia said the change moves the CBDC sandbox from small-scale proof-of-concept testing to a scale that can handle ordinary consumer payments and remittance scenarios. The BoK has repeatedly said that a won-denominated CBDC and won stablecoins can coexist, while maintaining that the CBDC route should remain bank-led. Phase 2 gives that position a larger operating scope.
Regulatory sandbox moves ahead while DABA remains stalled
One of the central disputes around DABA is who should be allowed to issue stablecoins. The BoK has argued for a bank-led model, while industry participants and some lawmakers have opposed what ABMedia referred to as the “51% bank rule,” saying it would suppress competition.
The report also referenced earlier coverage by Chain News saying the Ministry of Economy and Finance, or MOFE, had included DABA passage in its second-half legislative agenda. Even so, the legislation does not resolve the BoK’s preferred policy route.
In that context, the FSC’s approval of Hangang phase 2 gives the BoK a way to push its bank-led approach through the innovative finance sandbox without waiting for DABA to pass and without first settling questions over responsibilities and authority with private stablecoin issuers.
ABMedia also cited Chain News reporting from April that new BoK Governor Rhee Chang-yong? No, the source names Shin Hyun-song as the new governor, and said he had listed expanding CBDC and deposit tokens as one of four policy priorities in his inaugural speech. Phase 2 is presented as a direct follow-through on that agenda.
Other innovative finance approvals in the same batch
Besides Project Hangang, the FSC approved four other innovative financial services in the same round. ABMedia highlighted two of them as more significant for the industry.
- Two companies were cleared to issue prepaid cards and electronic payment instruments to foreign travelers without standard local real-name verification, with a per-transaction limit of 1 million won.
- Kakao Bank and Busan Bank were approved to launch a joint loan product offering preferential rates to small and medium-sized enterprises and small business owners.
The report said the foreign-traveler payment measure would provide practical convenience for tourists and short-term business visitors entering South Korea.
Total designated services reach 1,111
Following this round, the FSC has designated 1,111 innovative financial services in total and revised seven existing ones. ABMedia said the innovative finance sandbox, in place since 2019, has become a main channel for putting fintech services into practical use in South Korea. The expansion of Hangang phase 2 adds another example of that policy path in action.