South Korea has expanded the use of blockchain technology in the public sector by including digital payments among the solutions that institutions can test for operational expenses. The new regulation applies to specific costs incurred by employees in the course of their duties, including advertising and related expenses. This is not a complete transition of the government apparatus to digital currency, but an approved scenario for using the technology within a regulatory experiment. The decision is part of nine exceptions to existing restrictions for new technologies and services, approved following a written review by the ICT Regulatory Sandbox Committee on September 21. This allows authorities to test the new mechanism in real conditions without automatically applying it to all government payments.
A separate change concerns the method of conducting operations. In addition to the traditional use of physical payment cards, institutions will be able to use QR codes on smartphones. This format is expected to simplify the execution of certain expenses while simultaneously providing an opportunity to assess the practical effectiveness of digital infrastructure. One of the system's features is the combination of payment and reconciliation procedures: when using blockchain-based digital currency, the settlement and confirmation of the operation are expected to be conducted within a single process. In the traditional scheme, these stages can be separated over time, so the new approach is considered a way to reduce the number of subsequent procedures in expense processing. In practice, the effectiveness of such a mechanism is yet to be evaluated through its use by government organizations.
However, the approved rules do not yet disclose the key parameters of future technology application. It is not specified which digital currencies institutions will be able to use, how many organizations will be connected to the system, and what volume of government expenditures will be processed through the new mechanism. Separate control over operations and monitoring of digital funds usage is also expected, which should allow for the assessment of the experiment's results and associated risks. The regulatory sandbox in this case serves as a test environment: authorities can observe the technology's operation in a limited practical scenario and collect data for further decisions. Therefore, the current resolution should primarily be seen as permission to test a new payment method, rather than an announcement of a large-scale implementation of blockchain currency across the entire system of government expenditures.
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