The Bank of Korea is pushing forward with its digital won experiment, building on the foundation of Project Hangang, a central bank digital currency pilot that enrolled seven commercial banks and set a participant cap of 100,000 users in its first phase. Reports now point to a Phase 2 expansion that could bring additional banking partners into the fold, though official confirmation of the next stage's launch and scope remains limited.
South Korea's central bank, together with the Financial Services Commission and Financial Supervisory Service, formally established the CBDC pilot project framework in October 2023, working in cooperation with the Bank for International Settlements. The initiative, branded Project Hangang, tested deposit token and CBDC infrastructure across KB Kookmin, Shinhan, Woori, Hana, IBK, NongHyup, and Busan Bank.
BOK Governor Chang Yong Rhee confirmed in his January 2, 2026 New Year address that the first phase of pilot testing had been completed. "The Bank completed the first phase of pilot testing under 'Project Hangang' last year and plans to carry out the second phase this year," Rhee stated in remarks published by the BIS.
What a Phase 2 Digital Won Pilot Would Mean
A second phase would signal that the Bank of Korea sees enough promise in its initial results to deepen testing. Phase 1 focused on building core infrastructure and running controlled trials with a capped user base across seven banks. Moving to Phase 2 typically implies broader transaction scenarios, more participants, and stress-testing under closer-to-real-world conditions.
The BOK has been careful to note that it has not yet decided whether to issue a CBDC. Official materials frame the entire pilot as research into future monetary infrastructure rather than a commitment to launch a digital won for public use.
That distinction matters. Central banks worldwide run multi-phase pilots without ever reaching full deployment. The digital won pilot is best understood as a structured experiment, not a product rollout.
Why Expanding Bank Participation Changes the Picture
Adding banks to a CBDC pilot extends its testing surface. Commercial banks handle the distribution layer in most CBDC designs, processing deposits, managing wallets, and settling retail transactions. More banks means more variety in operational conditions and customer bases.
Phase 1 already included a broad cross-section of South Korean banking, from the country's four largest commercial banks to a regional player in Busan Bank. If two additional institutions join Phase 2, it would push the pilot closer to representing the full domestic banking ecosystem.
However, no official Bank of Korea announcement has confirmed which banks, if any, have been added for a second phase. External reporting from mid-2025 indicated that institutional momentum in digital asset infrastructure was growing across Asia, but BOK-specific details on new participants remain unconfirmed.
South Korea's CBDC Push in a Shifting Policy Landscape
The digital won pilot sits at the center of a broader Korean policy debate. While BOK tests a central bank-issued digital currency, private sector players and legislators have turned attention toward won-denominated stablecoins as a potentially faster route to digital payments modernization.
By mid-2025, external reporting suggested that second-phase discussions had been temporarily paused as regulators shifted focus toward stablecoin policy frameworks. That pivot reflects a tension seen in multiple jurisdictions grappling with digital currency regulation, where central bank projects and private-sector alternatives compete for policy bandwidth.
The stablecoin discussion has complicated the CBDC timeline. Banks and industry groups began exploring private stablecoin initiatives, raising questions about whether a government-issued digital won would need to coexist with, or compete against, commercial alternatives.
South Korea is not alone in running phased CBDC pilots. Central banks typically use staged testing to evaluate technical resilience, privacy safeguards, and interoperability before making any issuance decision. The phased approach also lets policymakers adjust based on evolving macroeconomic and monetary policy conditions without committing to a fixed rollout calendar.
Governor Rhee's stated intention to proceed with Phase 2 in 2026 remains the most recent official signal of forward momentum. Whether the pilot advances on that timeline, or yields further to the stablecoin policy track, will depend on how Korean regulators balance innovation speed against the infrastructure costs and competitive dynamics that have shaped the debate so far.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.