The Bank of Korea (BOK) has named its offshore won settlement system the “Bank of Korea Won International Settlement Network” and is building the infrastructure with the goal of launching a trial operation in September, the central bank said on the 21st.
Four major commercial banks — KB Kookmin, Woori, Hana and Shinhan — are set to participate in the trial operation, and the BOK is currently conducting tests with the participating institutions.
The central bank also plans to complete the enactment and revision of related rules, including the BOK’s “Regulations on the Operation and Management of the Payment and Settlement System,” within August. Following the trial operation, it plans to begin full 24-hour operation in January next year. The system will operate 24 hours (from 9 a.m. to 9 a.m. the following day) on business days, excluding weekends and public holidays.
The BOK Won International Settlement Network is a payment system that enables foreigners to freely trade won with other foreigners using accounts opened at banks in their home countries. Earlier, the government announced a “Won Internationalization Roadmap” allowing foreigners to freely use the won abroad, following the move to open the Seoul foreign exchange market for 24 hours.
“We expect that building the Won International Settlement Network will improve foreigners’ access to won settlement infrastructure while contributing positively to matters such as inclusion in the Morgan Stanley Capital International (MSCI) developed markets index,” a BOK official said. “Foreign investors will be able to carry out won settlements during the business hours of financial markets in each country regardless of time differences, which will increase the convenience of using and managing the won,” the official added.