Shinhan Bank said on Tuesday it will take part in the second phase of the Bank of Korea’s digital currency pilot, Project Hangang, and expand the use of deposit token-based payment services across everyday life.

The project is a phase to verify the commercial viability of a digital currency-based payment infrastructure, focusing on creating an environment in which customers can use deposit tokens in real life. It will broaden participation and usage settings compared with the first phase, and it plans to more widely test real-world usability by upgrading functions such as person-to-person transfers, interest payments and automatic conversion.

Customers can use Shinhan’s SOL Bank app to convert deposits into deposit tokens and use them for various everyday payments, including the delivery app Ttaenggyeoyo, convenience stores and Shinhan EZ Insurance travel insurance. The bank also plans to introduce a merchant payment method linked with Shinhan Card to improve usability across online and offline channels.

The project will also test the potential for expansion into public finance execution. It would pay local government subsidies and vouchers and policy funds on a deposit token basis for use at designated outlets. This is expected to prevent funds from being used for unintended purposes and improve the efficiency of payments and settlements.

Shinhan Bank said that in real-transaction tests conducted from April last year, it accounted among participating banks for 25 percent of total e-wallet openings, 58 percent of usage cases and 73 percent of transaction amounts, confirming real-world usability and customer acceptance of deposit token-based payments. In the second phase, it plans to build on this experience by strengthening links with group affiliate platforms and accelerating the creation of a digital payment ecosystem spanning private and public sectors.

A Shinhan Bank official said, "Deposit tokens are developing into a digital means of payment that can be used beyond technology verification for actual payments and public finance execution." The official added, "Shinhan Bank will expand payment experiences that customers can feel in daily life and lead the building of a digital currency-based payment and settlement infrastructure."