Toss Payments wins South Korea’s CBDC merchant gateway contract, targeting millions of small shops

South Korea has named Toss Payments — the payment-gateway arm of super-app operator Viva Republica — as preferred negotiator for a ₩9.6 billion (~$6.7 million) government contract to connect the country’s deposit-token network to the point-of-sale systems used by millions of small businesses, extending Project Hangang’s central bank digital currency infrastructure into civilian commerce for the first time.

The contract was awarded by the Ministry of Science and ICT (MSIT) and the Korea Internet & Security Agency (KISA) under their 2026 Blockchain Innovation Leading Project program. A joint launch ceremony was held on July 22 at KISA’s Seoul headquarters. The Korea Financial Telecommunications and Clearings Institute (KFTC) will serve as the project’s lead organizer, coordinating a consortium of nine commercial banks, eight payment gateways, and two major retailers, with real-world merchant testing scheduled to begin in the second half of 2026.

The critical design decision — and the one that makes this contract significant beyond its contract value — is backward compatibility. Merchants will not need to replace existing point-of-sale terminals or rebuild back-office integrations. Toss Payments, using its existing payment-gateway infrastructure and merchant relationships, will bridge deposit-token wallet transactions to the payment rails merchants already use.

What Deposit Tokens Are, and Why They Differ from Stablecoins and Retail CBDC

South Korea’s approach to digital money is easily misread as another blockchain payment experiment. Understanding why it is not requires understanding what a deposit token actually is — and what it is not.

A deposit token is a blockchain-based digital representation of a conventional bank deposit. The underlying liability stays on the issuing bank’s balance sheet, subject to the same regulatory requirements as any other deposit — including deposit insurance coverage. This distinguishes deposit tokens from stablecoins, which are claims on the stablecoin issuer rather than on a regulated bank, a distinction the Bank for International Settlements identified in April 2023 as structurally significant for the stability of the monetary system.

It also distinguishes them from a retail central bank digital currency, in which the central bank issues digital currency directly to the public. Under Project Hangang, the Bank of Korea issues wholesale CBDC only to financial institutions. Those institutions then create deposit tokens, which consumers hold and spend through bank-provided wallet apps. The central bank provides the settlement backbone; the banks maintain the customer relationship.

The mechanism that makes this work — and that the Bank for International Settlements identified as the critical design choice for preserving what monetary economists call the “singleness of money” — is the burn-and-issue protocol. When a customer of Bank A pays a merchant whose account is at Bank B, three steps execute as a single atomic transaction via smart contract: the sending bank’s deposit tokens are burned; an equivalent amount of wholesale CBDC transfers between the two banks on the Digital Currency System (DCS), the Bank of Korea’s permissioned Hyperledger Besu ledger; and the receiving bank reissues deposit tokens to the merchant. If any one step fails, the entire transaction is voided — there is no partial settlement, no gap between delivery and payment, no counterparty risk.

Private stablecoins cannot make the same guarantee. A stablecoin transfer transfers a claim on the issuer; if that issuer’s reserves or creditworthiness deteriorates, the token’s value can diverge from par. That is a structural property of the instrument — not a risk-management question — and it is why the BIS concluded in April 2023 that stablecoins circulating as bearer instruments are inherently less compatible with monetary singleness than deposit tokens that settle in central bank money.

The Technical Stack: Hyperledger Besu, Proof of Authority, and a BOK-Wire+ Gap That Remains Open

Project Hangang’s Digital Currency System runs on Hyperledger Besu, an open-source permissioned blockchain platform. The Bank of Korea operates as the sole validator under a Proof of Authority consensus model — meaning the central bank finalizes every transaction rather than relying on distributed validation. This design avoids the congestion, fee volatility, and fragmentation risks of public blockchains.

The token architecture separates value transfer from conditions. A currency layer, implemented in ERC-20 (the standard for fungible blockchain tokens), handles the actual movement of money. A separate conditions layer, implemented in ERC-1155 and being upgraded to ERC-3525, carries the programmable spending restrictions — which vendors are approved, which time windows are permitted, which expense categories qualify — without embedding that logic in the money itself. A coding error in a spending-condition contract cannot corrupt the fungibility of the underlying deposits; the money and the rules live in separate objects. The full architecture is documented in the Bank of Korea’s detailed Project Hangang Phase 2 technical overview.

The Toss Payments integration layer will sit between consumers’ bank-issued deposit-token wallet apps and the merchant-side acquiring infrastructure. When a consumer pays by scanning a QR code or tapping their phone, the bank wallet initiates a deposit-token transaction on the DCS; Toss Payments, acting as the payment gateway, routes the confirmation to the merchant’s existing POS terminal through the payment rails the merchant already uses. No new terminal hardware, no new merchant software integration, no retraining — the deposit-token payment arrives at the merchant’s existing system as a settled payment.

The significance of this design is not merely operational convenience. Prior CBDC pilot programs globally have consistently stalled at the merchant layer, because requiring merchants to replace terminals or rebuild integrations creates an adoption barrier that no incentive structure has reliably overcome. South Korea’s combination of atomic interbank settlement (solving the monetary-system design problem identified by the BIS) and backward-compatible POS integration (solving the adoption-friction problem) constitutes the first documented real-world attempt to address both simultaneously at scale. The BIS identified both problems in its 2023 Annual Economic Report’s “unified ledger” blueprint; no central bank had moved from blueprint to signed private-sector contract on both dimensions until now.

One constraint that the Toss Payments contract does not resolve is the engineering gap between the DCS and South Korea’s legacy interbank settlement system. The DCS operates around the clock; BOK-Wire+, which has handled South Korean interbank settlement since 1994, operates only on weekdays from 9:00 a.m. to 8:00 p.m. The two systems reconcile offline via encrypted USB media, with changes in each bank’s wholesale CBDC balance captured in a daily 3:00 p.m. snapshot rather than in real time. Bank of Korea Governor Shin Hyun-song acknowledged this in a paper for the European Central Bank Forum on Central Banking 2026 as a “transitional arrangement” requiring resolution before true 24/7 continuous commercial operation becomes possible.

From Lab to Storefront: How Project Hangang Reached This Point

South Korea’s CBDC journey began with Project Hangang Phase 1, which ran from April to June 2025 with seven banks and approximately 12,000 merchant locations, generating roughly 114,880 transactions. The pilot confirmed technical reliability but revealed an adoption problem: of 100,000 citizens invited to participate, about 80,000 opened wallets, and total payment volume reached approximately ₩692 million (about $483,000) — modest against the roughly ₩30 billion to ₩35 billion ($20.9 million to $24.4 million) the participating banks collectively spent building Phase 1 infrastructure.

Phase 2, launched in March 2026 with nine banks, broadened the scope. It added biometric payment approvals, person-to-person wallet transfers, automatic top-ups, recurring autopayments, and the first live programmable government disbursements — delivering electric vehicle charging subsidies to qualifying operators via smart contracts that enforce approved vendors, time windows, and expense categories at the moment of transaction, blocking fraud before money moves rather than auditing receipts after. The Financial Services Commission formally designated Phase 2 as an “innovative financial service” on July 15, 2026 — a regulatory sandbox classification that allows the nine participating banks to issue deposit tokens to up to 500,000 users, with large-scale live transactions targeting September. All of this context and technical detail is covered in the prior TechTimes report on Project Hangang Phase 2.

The MSIT/KISA merchant infrastructure contract announced Thursday is the next layer on that foundation. Of the ₩9.6 billion ($6.7 million) total budget, approximately ₩3 billion ($2.1 million) will be allocated specifically to development, operations, and promotional activities involving small and medium-sized enterprises, startups, and information technology firms participating in system development and commercialization. Participating commercial banks and other consortium members plan to undertake additional related projects valued at approximately ₩4.5 billion ($3.1 million) alongside the main initiative.

Read more: South Korea Moves Digital Won Into Real Government Funds as US Blocks CBDC

Lower Fees, Faster Settlement: What South Korean Small Businesses Stand to Gain

The government’s explicit rationale for the project is fee relief for South Korea’s small-business sector. South Korea’s card payment ecosystem routes funds through a chain of acquirers, card networks, and issuers, each extracting a transaction toll. Deposit-token payments, settling directly on blockchain infrastructure with the Bank of Korea’s wholesale CBDC as the backbone, are expected to carry materially lower per-transaction costs by eliminating card-network intermediary fees.

Settlement timing is the second commercial benefit. Conventional card transactions in South Korea typically take one to three business days to settle to a merchant’s account. Because deposit tokens represent actual bank funds moving atomically with the payment instruction, settlement can in principle be instantaneous — a significant cash-flow benefit for small businesses that depend on rapid capital turnover. The BOK-Wire+ reconciliation constraint means fully instantaneous 24/7 settlement is not yet operational for weekday-off-hours and weekend transactions; however, within BOK-Wire+ operating hours, the DCS enables real-time finality at the interbank leg.

Toss Payments in the Larger Toss Ecosystem

Toss Payments is the payment-gateway subsidiary of Viva Republica, the Seoul-based fintech company founded in 2013 by Lee Seung-gun, a former dentist who built the Toss super app into one of South Korea’s most-used financial platforms. The broader Toss ecosystem spans banking, securities, insurance, payments, and merchant services, serving tens of millions of users across South Korea. Viva Republica has been separately pursuing a US initial public offering, with Reuters reporting in 2025 that the company was targeting a listing at a valuation above $10 billion.

Separately, Viva Republica has been developing a proprietary blockchain mainnet and exploring stablecoin applications — a parallel track to the regulated CBDC infrastructure of the Toss Payments contract. Lee Seung-gun has stated his intention to issue a Korean won-denominated stablecoin once regulations permit it. The two tracks — government CBDC gateway and private stablecoin ambition — are not mutually exclusive, but they operate under different legal frameworks and different institutional relationships. The MSIT/KISA contract positions Toss Payments within regulated central bank infrastructure; the stablecoin track operates under the still-unresolved Digital Asset Basic Act, which is targeted for National Assembly passage in the second half of 2026.

The CBDC gateway contract adds an institutional infrastructure dimension to Toss Payments’ consumer-facing portfolio. As preferred negotiator for the government’s flagship CBDC commercialization project, Toss Payments is positioned at the center of what could become the next generation of South Korea’s payment architecture — one that settles instantly, operates around the clock, and costs merchants less per transaction.

Read more: South Korea Folds Crypto Into National Asset Law as Japan Passes Its Own Reform

Will Merchants Have to Change Anything to Accept Digital-Won Payments?

The short answer is no — and the long answer explains why backward compatibility is the architectural choice that distinguishes this rollout from most prior CBDC merchant adoption attempts.

Under the consortium structure, merchants accept deposit-token payments through existing POS terminals. Consumers initiate payments using bank-provided deposit-token wallet applications, scanning QR codes or tapping their phones at the same terminals they already use for card payments. Toss Payments, as the payment gateway, handles the bridge between the bank-wallet transaction on the DCS and the merchant’s existing acquiring relationship. The merchant receives confirmation and settlement through the same channels currently used for card payment processing, as the KISA/MSIT project documentation confirms.

The eight payment gateway firms in the consortium alongside Toss Payments ensure that deposit-token acceptance will be available across a broad cross-section of acquiring relationships from day one, rather than being siloed within a single provider’s merchant base. The two major retail partners in the consortium provide the pilot merchant locations where real-world testing will begin in the second half of 2026.

Currency conversion note: All won-to-dollar conversions in this article use the approximate exchange rate of ₩1,432 per US dollar as of July 31, 2026, and are rounded for readability. Conversions are approximate and subject to rate fluctuation.

Frequently Asked Questions

What is a deposit token, and why does South Korea use them instead of a retail CBDC?

A deposit token is a blockchain-based digital representation of a conventional bank deposit. The liability stays on the issuing bank’s balance sheet, covered by deposit insurance and subject to existing bank regulations. South Korea chose this model rather than a retail central bank digital currency — in which the central bank issues digital money directly to the public — to preserve the commercial banking sector’s role in credit creation and customer relationships. The Bank of Korea issues wholesale CBDC only to the nine participating banks; those banks issue deposit tokens to consumers. The burn-and-issue settlement mechanism ensures that when a deposit token moves between customers of different banks, all three steps (burn, interbank CBDC transfer, reissue) execute atomically — meaning every deposit token settles at par in central bank money, regardless of which bank issued it. This is what monetary economists call the “singleness of money,” and it is the property that private stablecoins cannot reliably guarantee.

Will South Korean merchants have to replace their payment terminals or rebuild their software to accept deposit-token payments?

No. The Toss Payments integration is specifically designed to be backward compatible with existing point-of-sale hardware and acquiring relationships. Consumers will pay using bank-issued deposit-token wallet apps; Toss Payments bridges those transactions to merchants’ existing payment rails. A merchant who currently accepts card payments will be able to accept deposit-token payments through the same terminal, without new hardware, software integration, or staff retraining. This design choice — prioritizing backward compatibility over a purpose-built new payment network — is what allowed the government to assemble a nine-bank, eight-payment-gateway consortium rather than requiring a full infrastructure replacement.

When will South Korea’s deposit-token payment network be available to ordinary consumers and businesses?

Phase 2 of Project Hangang, which authorized up to 500,000 consumers to hold deposit-token wallets at nine participating banks, is targeting large-scale live transactions beginning in September 2026. The MSIT/KISA merchant infrastructure project — the Toss Payments contract — is scheduled to begin real-world testing in merchant environments in the second half of 2026, with detailed development and integration planning now underway with the consortium partners. A full commercial rollout depends on resolving several open questions: the engineering gap between the DCS and South Korea’s legacy BOK-Wire+ settlement system, the legal status of wholesale CBDC issued natively on the DCS, and the Digital Asset Basic Act’s final rules governing stablecoin issuance and the digital currency regulatory framework.

How does this compare to what other countries have done with CBDCs?

Only three countries have launched a retail central bank digital currency — the Bahamas (Sand Dollar, October 2020), Nigeria (eNaira, 2021), and Jamaica (Jam-Dex, 2022) — and all three use a direct-retail issuance model rather than South Korea’s wholesale-plus-deposit-token approach. China’s digital yuan (e-CNY) is the largest CBDC pilot, having processed more than 3.4 billion transactions worth roughly 16.7 trillion renminbi (approximately $2.3 trillion USD) by late 2025, according to the Atlantic Council CBDC Tracker; it is a retail CBDC issued directly by the People’s Bank of China through state-owned banks, not a deposit-token system. South Korea’s combination of atomic interbank settlement through wholesale CBDC and backward-compatible merchant gateway integration is architecturally distinct from both models — and represents the first major government-backed attempt to validate the BIS’s 2023 “unified ledger” blueprint for tokenized deposits at the civilian point-of-sale layer.

Source: https://www.techtimes.com/articles/322408/20260731/south-korea-taps-toss-payments-route-cbdc-merchant-checkouts-without-replacing-terminals.htm

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As mobile devices and government regulators embrace facial recognition technology, your face is becoming both wallet and identification.

Smile – your face is becoming a path for payments.

Apple and Android digital wallets are common tools for consumer payments, but they’re also increasingly intertwined with identification in an era where identities are digital and tied to biometric data.

“Essentially, your face becomes your wallet,” said Prashant Sharma, JPMorgan Chase’s global head of product, overseeing biometric payments and digital identity. “The best checkout is where the consumers don’t have to think about payment, and that’s what biometrics actually enables.”

Apple and Google, two of the largest technology companies, have leaned heavily into digital IDs within their respective phone-based wallets. Meanwhile, 22 states and Puerto Rico have authorized mobile driver’s licenses that can be carried on a digital wallet or state-issued app, according to IDScan.net, a New Orleans-based identity verification software provider.

These trends are converging to increase the use of biometrics in digital wallets, heralding a time in which consumers will make retail purchases, access loyalty programs and board flights with identification and payment data linked to their bodies. A face scan or fingerprint can also potentially reduce payments fraud.

Consumer biometrics date largely to the arrival of sophisticated smartphones and digital wallets over the past decade. They have been tied to passkeys – an authentication method based on a digital credential that isn’t a password – and have enabled biometric payments.

The use of passkeys has reached “global scale” with 5 billion in active use, the FIDO Alliance said in a May report on passkey growth. About 90% of consumers are aware of passkeys and three-quarters have enabled their use on some of their accounts, according to the report, which was based on a survey of 11,000 adults in the U.S. and nine other nations.

“Biometric authenticated payments, once considered emerging, have become mainstream,” card network Visa said in a payments trends report last year. Consumer demand for such payments is growing and “merchants are starting to incorporate them at increasing rates,” the report added.

Consumers have embraced biometric-based IDs through their devices, said a payments executive for Alphabet’s Google, which makes the Android operating system for smartphones.

Source: https://www.paymentsdive.com/news/digital-id-and-payments-turn-to-your-face/824041/

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Congress has taken a decisive step to curb federal payments mistakenly sent to deceased individuals, a problem costing taxpayers millions annually.

Sen. John Kennedy (R-LA) announced that both the Senate and House have passed the Ending Improper Payments to Deceased People Act.

This legislation aims to make permanent a data-sharing arrangement between the Social Security Administration (SSA) and the Treasury Department.

The bill, which Kennedy spearheaded, is now headed to President Donald Trump’s desk for signature into law.

The issue has sparked significant debate over government efficiency and accountability.

While some view this as a necessary fix, others question why such an obvious gap took so long to address.

For years, Kennedy has fought to address welfare fraud, particularly payments sent to the deceased.

He’s highlighted it as a glaring inefficiency in federal operations, Breitbart reported.

“I have been working for years, literally years, to target welfare fraud — especially the fraudsters who conduct fraud in the name of deceased Americans,” Kennedy stated.

That dedication reflects a deep frustration with bureaucratic hurdles.

The root of the problem lies in the SSA’s Death Master File, a list of deceased Americans not previously shared with other federal agencies.

Kennedy learned the SSA required congressional approval to release this data, stalling progress for too long.

Years ago, Kennedy pushed through the Stopping Improper Payments to Deceased People Act, enabling temporary data sharing with the Treasury Department.

This initial step showed immediate results.

“Since December of 2023, this bill has saved the federal government at least $330 million in improper payments,” Kennedy noted.

That significant saving exposes the scale of prior waste.

Linking the data to the Treasury Department’s Do Not Pay system was a critical move.

It raises a nagging question: why wasn’t this standard practice from the start?

Given the success of the temporary measure, Kennedy introduced the Ending Improper Payments to Deceased People Act to solidify this data-sharing arrangement.

The House passed it this week, following earlier Senate approval.

The problem’s magnitude is striking.

Kennedy revealed that in 2023 alone, over a billion dollars went to deceased individuals.

That’s hard-earned taxpayer money lost to exploitation.

With the bill now en route to the president, there’s optimism that this gap will close.

Yet, it’s tough to ignore how much more inefficiency might still lurk in government systems.

This legislation goes beyond halting payments to the deceased; it’s a signal for improved agency coordination.

Siloed operations aren’t just wasteful, they’re a disservice to the public.

While this bill addresses one specific flaw, it underscores a broader demand for fiscal oversight.

Taxpayers shouldn’t foot the bill for basic governmental oversights.

Ultimately, Kennedy’s efforts spotlight a fixable issue, but the fight for efficiency is far from over.

The federal system must prioritize accountability to prevent such waste from recurring.

Source: https://slaynews.com/news/congress-passes-bill-block-taxpayer-funded-payments-dead-people/

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Europe has taken a major step toward ending financial privacy as the globalist European Union (EU) will officially criminalize large cash payments.

Beginning January 2027, any cash transaction above €10,000 will be outlawed in the EU, making large cash purchases illegal across all 27 member states.

The move is part of the EU’s sweeping new Anti-Money Laundering (AML) package.

Unelected EU officials insist that AML targets criminals but, in practice, places ordinary citizens under full financial surveillance.

Crackdown on Cash & Bitcoin

Under the new rules:

  • Any cash payment over €10,000 becomes a criminal offense.

  • Any crypto transaction above €1,000 without approved identity verification is subject to prosecution.

Meanwhile, anonymous digital wallets, used for Bitcoin and other cryptocurrencies, are banned entirely.

The new laws mandate that every crypto transfer must be linked to a verified digital ID.

Officials claim it’s about “security.”

Critics say it’s about control.

Digital Euro Looms: Programmable, Trackable, and Tied to Identity

The new laws are in preparation for the looming central bank digital currency (CBDC) that is due to soon launch across all EU nations.

The European Central Bank (ECB) has confirmed plans to roll out the Digital Euro by 2029.

The Digital Euro is a fully programmable currency that gives regulators unprecedented power:

  • Limits on how much you can hold

  • Restrictions on what you can buy

  • Expiration dates for digital cash

  • Real-time spending surveillance

Europe’s crackdown doesn’t exist in a vacuum.

As Slay News has previously reported, governments around the world are quietly constructing the same system:

Canada is advancing a federal digital ID program under the guise of “modernizing service delivery.”

The United Kingdom, under socialist Prime Minister Keir Starmer, is reviving national digital ID plans once thought politically toxic.

In addition, Australia’s 2024 Digital ID Bill establishes a unified, government-verified identity system, which is currently being rolled out for public use.

The EU’s Digital Identity Wallet, rolling out in phases, aims to link banking access, medical data, travel permits, and online authentication under one government-issued credential.

Each digital ID initiative claims to be “voluntary.”

Yet, each one slowly becomes required to access essential services, travel, vote, or manage finances.

Once a digital ID becomes a prerequisite for banking, linking it to programmable digital cash becomes automatic.

The Blueprint: Control First, “Safety” Later

Once cash is restricted and digital IDs become mandatory, a programmable currency lets governments:

  • Disable transactions in certain industries

  • Set carbon-tracking limits and block “high-emissions” purchases

  • Shut down accounts of political dissidents

  • Impose automatic fines

  • Track every purchase in real time

  • Declare certain transactions illegal without passing new laws

A system like that doesn’t just monitor spending, it manages it.

If the model works in Europe, the rollout expands globally.

Europe Is Only the Beginning

Regulators don’t hide their intentions.

Banking lobbies across the West have repeatedly warned that cash is “inefficient,” that anonymous transactions “pose risk,” and that centralized digital currency is “inevitable.”

The EU law effectively marks the beginning of the end for private transactions.

Starting in 2027, the government will decide what “legal spending” looks like.

By 2029, the government will decide how you spend, where you spend, and if you’re allowed to spend at all.

Critics warn the real threat isn’t money laundering, it’s the quiet construction of an economic system where financial permission replaces financial freedom.

Europe is the pilot program.

The world is next.

Source: https://slaynews.com/news/europe-criminalizes-large-cash-payments-ahead-digital-euro-launch/

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