Bank of Korea Governor Rhee Chang-yong visits Jeju… reviews rollout of Phase 2 of CBDC ‘Project Hangang’

Amid heightened volatility in the won-dollar exchange rate following the fallout from U.S. airstrikes on Iran, Bank of Korea (BOK) Governor Rhee Chang-yong has reportedly visited Jeju Island to review projects related to a central bank digital currency (CBDC).

According to industry sources on the 16th, Rhee traveled to Jeju to assess the local economy and to attend a signing ceremony for a memorandum of understanding aimed at using the BOK’s digital currency and deposit tokens. Officials from the BOK’s digital currency and statistics departments are also taking part in the trip, and Jeju Province and local research institutions are said to be participating in the agreement as well.

In the financial sector, the visit is being viewed as aligned with the BOK’s push to advance Phase 2 of its CBDC pilot project, ‘Project Hangang.’ The project tests, in real-world settings, a payment and remittance system based on “deposit tokens” that use tokenized forms of central bank digital currency and bank deposits.

The BOK is first reviewing a plan to apply CBDC-based deposit tokens to projects to build electric-vehicle charging infrastructure. It is also reportedly discussing expanding their use to areas of public fund disbursement, such as subsidies and vouchers.

Project Hangang conducted its first phase of live-transaction testing last year, but related experiments were temporarily suspended as discussions over a won-denominated stablecoin surged. Since then, the BOK has reportedly continued reviewing a plan to reorganize the project structure and proceed with a second-phase pilot.

However, with about a month remaining in Rhee’s term, concerns have also been raised about policy continuity going forward. Financial-sector observers say the project itself is likely to continue, given the government’s long-term push to build a digital-currency-based payment infrastructure.