KB Kookmin Bank said on Thursday it will take part in Phase 2 of Project Hangang, a digital currency pilot led by the Bank of Korea together with the Financial Services Commission and the Financial Supervisory Service.

KB Kookmin Bank joined the first phase in April last year and introduced a payment service based on a "deposit token". It carried out payment tests at online and offline merchants including Seven Eleven, Kyobo Book Centre, Ediya Coffee and Hyundai Home Shopping. It recorded about 30 percent of electronic wallet openings in real-transaction processes, the highest level among the participating banks.

The second phase will focus on improving payment convenience that can be felt in actual-use environments.

KB Kookmin Bank, in particular, cooperated with South Korean payment gateway firm KG Inicis to build a foundation for spreading deposit-token payments. It enabled payments using existing infrastructure without separate terminal replacements or system changes, reducing additional cost burdens for merchants and improving settlement efficiency.

Once service stability verification is completed, it plans to expand the scope of application based on KG Inicis' merchant network.

It will also expand the use of digital currency in the public sector. KB Kookmin Bank will take part in a "pilot project for the execution of national treasury funds" and verify a plan to convert work-related expenses of central administrative agencies to a deposit token basis. It aims to improve transparency in budget execution and management efficiency.

A KB Kookmin Bank official said, "Based on data and partnerships accumulated through the pilot project, we are gradually expanding the digital currency ecosystem." The official added, "We will build a digital financial environment that both customers and merchants can feel."