Opposition to Central Bank Digital Currency
The People Power Party in South Korea has expressed strong opposition to the launch of a Central Bank Digital Currency (CBDC), unless legal protections are firmly established regarding individual privacy, spending regulation, and the right to choose how to use their money. Party leader Jang Dong-hyeok shared his stance on the matter via a Facebook post dated September 13, just as the Bank of Korea moved forward with the next phase of Project Hangang, which involves testing digital currencies and tokenized deposits.
Concerns Over Privacy and Autonomy
Jang, who assumed leadership of the party in August 2025 following a disappointing presidential election showing, articulated his concerns during an era in which the ruling Democratic Party, led by President Lee Jae Myung, pushes ahead with various digital asset initiatives. He stated,
“I strongly oppose the introduction of CBDC until legal and institutional safeguards are perfectly established so that the public can feel safe.”
Jang emphasized that the arguments for increased efficiency and convenience in payments do not warrant the implementation of a CBDC before crucial legislative questions about privacy and individual autonomy are addressed.
This concern raises significant questions about the potential for governments to track citizens’ transactions closely and whether the introduction of a digital currency might limit where individuals can use their funds. Jang’s comments suggest fears that programmable currencies could impose conditions such as expiration dates on digital transactions, or limit consumer choice regarding forms of money.
Legislative Concerns and Project Hangang
Just before Jang’s remarks, the People Power Party voiced concerns over other components of the government’s digital currency agenda, particularly in relation to proposed ownership restrictions for significant shareholders under the Digital Asset Basic Act and the taxation of cryptocurrencies. Negotiations around South Korea’s digital asset legislation are ongoing, with the usual legislative processes getting under scrutiny, as reported by crypto.news.
Project Hangang, as described by the Bank of Korea, is an initiative involving mostly institutional, or wholesale, components of a CBDC. This means that while banks engage directly with central bank components, the public interacts through tokenized deposits offered by commercial institutions. The pilot program previously allowed adults to convert bank funds into tokens, which they could spend with QR codes at selected vendors. However, the Bank clarified that this was not a formal rollout of a digital currency, emphasizing that the trial operated within the country’s regulatory sandbox framework.
The Project Hangang pilots showcased how deposit tokens could be tied to specific governmental issues, like youth welfare or small business support, with restrictive conditions governing their usage. Jang’s concerns echo issues raised during these tests, although current Bank of Korea materials do not suggest that similar restrictions would apply to conventional bank funds or deposits.
Expansion of Project Hangang
The Bank of Korea officially revealed the second phase of Project Hangang on March 18, 2026, expanding its operations from seven participating banks to nine by including BNK Kyongnam Bank and iM Bank. This phase aims to enhance user experience with features such as peer-to-peer transfers and biometric authentication. It is projected to enable a significantly larger number of digital wallets, from 100,000 to potentially 500,000.
Discussions about potential public-sector applications are also on the agenda, exploring the feasibility of digital payments for government subsidies and other expenditures. However, bank officials have maintained clear distinctions among wholesale CBDCs, deposit tokens, and private stablecoins in their policy frameworks.
Future of Digital Currency in South Korea
Additionally, Bank of Korea Governor Shin Hyun-song has been vocal about the importance of advancing digital currency initiatives, emphasizing safety in payment systems without a definitive timeline for public issuance. Comparatively, South Korea’s strategy contrasts sharply with U.S. policy where the previous administration, under Donald Trump, halted advances toward a CBDC. The governor’s statements underscore ongoing research into privacy technologies and offline capabilities for a potential CBDC, but the path ahead continues to be deliberated carefully.
As the second phase of Project Hangang unfolds, the Bank of Korea remains cautious about its next steps, with no automatic transition to a full-scale CBDC rollout confirmed upon the pilot’s completion.
