Bank of Korea will pilot a 24-hour won settlement system in September for foreign investors to support the currency's international standing and potential MSCI developed market index inclusion, the central bank reported to the National Assembly's Strategy and Finance Committee on the 9th. The new infrastructure aims to enable round-the-clock won fund transfers for foreign investors, addressing the current limitation where foreign exchange trading operates 24 hours but won settlement is restricted to domestic business hours. This settlement system backs the 24-hour foreign exchange trading framework that began implementation on the 6th, with BOK having already extended its financial network operating hours to 8 PM in March and completed ISO 20022 adoption in May.
BOK Builds 24-Hour Won Settlement Infrastructure for September Pilot
The central bank is constructing a new settlement system to enable 24-hour won fund transfers for foreign investors, scheduled for pilot operation in September. BOK extended its financial network operating hours to 8 PM in March and completed the adoption of international financial messaging standard ISO 20022 in May. The new system is designed to eliminate the time gap between trading and settlement, as current arrangements allow 24-hour foreign exchange trading but restrict won settlement to domestic business hours. Once operational, the infrastructure will enable won settlement around the clock from overseas locations.
Deposit Token Commercialization Expands to Treasury Subsidies in Second Half
BOK plans to expand deposit token initiatives in the second half of this year by supporting treasury subsidy execution using deposit tokens and identifying additional use cases such as vouchers. The central bank will also pursue follow-up real transactions targeting the general public to establish a foundation for commercialization. This expansion builds on earlier pilot programs as BOK moves deposit token technology toward practical implementation in government financial operations.
BOK Sets Safety Requirements for Won Stablecoin Framework
The central bank stated that won-backed stablecoins must be introduced with consideration for their impact on monetary policy, foreign exchange policy, and financial stability, beyond industrial innovation aspects. BOK noted that stablecoins could potentially be used as a means to circumvent the foreign exchange regulation system centered on foreign exchange banks. In its recommendations for won stablecoin legislation, BOK emphasized the importance of establishing safety measures including prioritizing bank-led consortiums as issuers and creating a statutory policy coordination body among relevant agencies.
Cross-Border QR Payment Linkage Launched with Indonesia in April
BOK launched QR-based cross-border payment services with Indonesia in April and is pursuing linkages with other countries including Vietnam and India. The bilateral QR connectivity initiative aims to facilitate payment interoperability between participating nations' domestic payment systems, enabling users to make cross-border transactions using their existing mobile payment applications.
FAQ
What did Bank of Korea announce on the 9th regarding foreign investor settlement?
Bank of Korea reported to the National Assembly that it will pilot a 24-hour won settlement system in September for foreign investors to support the currency's international standing and MSCI developed market index inclusion efforts. The system will enable round-the-clock won fund transfers for foreign investors, eliminating the current restriction where settlement is limited to domestic business hours despite 24-hour foreign exchange trading availability.
Why does BOK require safety measures for won stablecoins?
BOK stated that won stablecoins must be introduced with consideration for their impact on monetary policy, foreign exchange policy, and financial stability beyond industrial innovation. The central bank noted stablecoins could potentially circumvent the foreign exchange regulation system centered on foreign exchange banks, and recommended prioritizing bank-led consortiums as issuers and establishing a statutory policy coordination body among relevant agencies during the legislative process.
