South Korea’s People Power Party has opposed any central bank digital currency rollout without legal safeguards covering privacy, spending controls and consumer choice.
Summary
- South Korea’s opposition People Power Party has opposed CBDC issuance without prior legal and institutional safeguards.
- Leader Jang Dong-hyeok questioned transaction tracking, spending controls, expiration limits and currency choice protections publicly.
- Project Hangang uses wholesale central-bank money beneath commercial banks’ tokenized customer deposits during trials nationwide.
- Phase two expands participating banks from seven to nine while adding peer-to-peer deposit-token transfer functions.
- Bank of Korea materials distinguish Project Hangang from a publicly issued retail CBDC system explicitly.
Digital Asset reported on Sept. 14 that party leader Jang Dong-hyeok published the position on Facebook one day earlier. His statement arrived as the Bank of Korea advanced the second phase of Project Hangang, its digital-currency and tokenized-deposit testing program.
“I strongly oppose the introduction of CBDC until legal and institutional safeguards are perfectly established so that the public can feel safe,” Jang said.
The conservative People Power Party sits in opposition to President Lee Jae Myung’s Democratic Party government. Jang took control of the party in August 2025 following its defeat in that year’s presidential election.
People Power Party questions CBDC transaction controls
Jang said payment convenience and efficiency did not justify proceeding before lawmakers settled questions about privacy and individual control. He asked how far authorities could trace citizens’ transactions and whether digital money could restrict where funds are spent.
His statement raised the possibility that programmable currency could carry expiration dates or other conditions. Jang asked whether people would retain a right to choose their preferred form of money if South Korea introduced a central bank digital currency.
“While there is a view that CBDC is a new technology capable of enhancing payment convenience and efficiency, we should not rush into it solely because of its convenience,” he said.
No evidence cited in the statement showed that the Bank of Korea had proposed expiration dates for every consumer payment or sought to eliminate cash. Jang framed the questions as safeguards that policymakers should resolve before formal adoption.
The party has taken separate positions against parts of the government’s digital-asset agenda. Digital Asset reported that it opposes proposed ownership limits for major shareholders under the planned Digital Asset Basic Act and favors suspending or removing cryptocurrency taxation.
South Korea’s digital-asset legislation remains under negotiation. As crypto.news reported, lawmakers have sought to advance the Digital Asset Basic Act while regulators debate stablecoin issuers, reserve rules and supervisory authority.
Project Hangang does not give consumers central-bank accounts
Official Bank of Korea materials describe Project Hangang as infrastructure built around an institutional, or wholesale, CBDC. Financial institutions use the central-bank component, while consumers interact with deposit tokens issued by commercial banks.
A retail CBDC would normally represent a direct claim on a central bank and be available for public use. Project Hangang’s consumer-facing tokens remain claims connected to deposits at participating commercial banks.
During the first phase, users converted money from bank accounts into deposit tokens through participating banks’ mobile applications. They spent the tokens through QR-code payments at approved physical and online merchants. Seven banks participated in the initial public test: KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, Industrial Bank of Korea, NongHyup Bank and Busan Bank. The trial ran from April through June 2025 and allowed up to 100,000 adults to apply.
The Bank of Korea said the pilot was not a formal introduction of digital currency. Participating banks offered the deposit tokens under South Korea’s financial regulatory sandbox. Project Hangang tested programmable public vouchers connected to youth culture, child care and support for students or small businesses. Conditions attached to such vouchers limited their use to designated purposes, following rules set for each public program.
Jang’s questions about restricted spending therefore concern capabilities that have appeared in the voucher tests. Bank of Korea documents do not say those restrictions would apply to every deposit token or conventional bank balance.
Second phase expands deposit-token transfers
The Bank of Korea formally announced Project Hangang’s second phase on March 18, 2026. The program expands participation from seven banks to nine, adding BNK Kyongnam Bank and iM Bank. Phase two includes peer-to-peer transfers, biometric authentication and automated movement between deposits and token wallets. The pilot is expected to increase the number of available wallets from 100,000 to as many as 500,000.
Public-sector uses under examination include government subsidies, electric-vehicle charging support and operational spending by government bodies. The tests are intended to assess whether programmable payments can enforce conditions set for a specific grant or voucher.
Crypto.news previously reported that South Korean authorities connected nine banks and major merchants to a 9.6 billion won program supporting deposit-token payments through existing retail infrastructure.
The Bank of Korea has kept wholesale CBDCs, deposit tokens and private stablecoins within separate policy categories. Deposit tokens represent commercial-bank liabilities recorded on infrastructure supported by tokenized central-bank reserves. Stablecoins depend on assets held by a private issuer under a different legal structure.
South Korea’s policy roadmap paired deposit-token testing with planned stablecoin rules. The central bank has argued that regulated bank consortiums should initially lead won-denominated stablecoin issuance.
Bank of Korea continues CBDC research without issuance decision
Bank of Korea Governor Shin Hyun-song backed continued work on CBDCs and deposit tokens when he began his four-year term in April. His inaugural speech placed Project Hangang and the Bank for International Settlements’ Project Agora within the central bank’s digital-payment plans.
As crypto.news reported, Shin supported expanding Project Hangang’s second phase while promising to protect payment and settlement stability. The speech did not announce a retail CBDC launch.
The central bank says it continues researching privacy technology and offline payments for a possible general-purpose CBDC. Its public materials do not set an issuance deadline or confirm that South Korean residents will receive direct accounts with the Bank of Korea. Jang compared South Korea’s direction with U.S. policy, where President Donald Trump directed federal agencies in January 2025 not to establish, issue or promote a CBDC. He said Japan had remained cautious, though the Bank of Japan continues technical experiments without deciding whether to issue a digital yen.
Project Hangang’s second phase is expected to test expanded deposit-token functions beginning in 2026. The Bank of Korea has not announced that the pilot will automatically proceed to nationwide commercial adoption when testing ends.
