Bank of Korea Launches 24-Hour Won Settlement Pilot to Boost Foreign Investment

Overview of the Bank of Korea's New Settlement Network

The Bank of Korea (BOK) has officially commenced pilot operations for its newly established 24-hour international won settlement network. Designed to remove long-standing structural friction for overseas capital, the initiative allows foreign investors to settle transactions denominated in Korean won outside of South Korea's conventional business hours. Four major domestic commercial lenders—KB Kookmin Bank, Woori Bank, Hana Bank, and Shinhan Bank—are participating in this initial trial phase, which functions continuously on business days while excluding weekends and public holidays.

A core architectural feature of this pilot is the utilization of Registered Foreign Institutions for KRW Business, commonly referred to as RFI-Ks. Under this framework, foreign market participants can execute won-denominated settlements through accounts held with these designated overseas institutions. Crucially, overseas investors are no longer mandated to open direct, standalone accounts with domestic South Korean financial institutions, drastically reducing onboarding complexity and administrative overhead.

Strategic Drivers and Market Implications

For institutional investors, corporate treasurers, and cross-border market participants, the introduction of round-the-clock won settlement addresses one of the most persistent bottlenecks in Asian foreign exchange markets. Historically, executing transactions in Korean won required navigating rigid local banking hours, introducing settlement risk and operational inefficiencies for funds operating in Western or Americas time zones.

By streamlining access and aligning settlement windows with global business hours, the Bank of Korea is actively working to elevate the international profile and liquidity of the won. This initiative aligns with broader national efforts to modernize the country's capital markets, potentially paving the way for increased inclusion in global bond indices and encouraging deeper foreign portfolio allocations into South Korean equities and fixed-income assets.

Integration with Advanced Digital Asset Trials

In parallel with traditional wire network upgrades, the central bank is actively exploring advanced next-generation settlement technologies. The Bank of Korea has participated in initiatives such as Project Agorá, a cross-border payment trial led by the Bank for International Settlements (BIS) that explores tokenized central bank reserves and commercial bank deposits. Additionally, the BOK continues to progress with Project Hangang, a domestic blockchain-based pilot focusing on the settlement of tokenized commercial bank deposits using wholesale central bank digital currencies (CBDCs). These parallel technical tracks suggest that future iterations of South Korea's cross-border infrastructure could heavily integrate distributed ledger technology.

What Investors and Executives Should Watch

As the pilot phase progresses toward the targeted full-scale commercial launch in January 2027, market participants should monitor several key milestones:

• Foreign Bank Onboarding: Track the expansion of participating institutions, particularly the integration of major international custodian and clearing banks during the 2027 rollout phase.
• Transaction Volume Growth: Evaluate adoption metrics and daily settlement volumes passing through RFI-K accounts to gauge real-world demand.
• Tokenization Synergy: Observe how traditional network upgrades intersect with the central bank's ongoing trials in wholesale CBDCs and blockchain-based tokenized bond settlements.

For more details, read the original report on Cointelegraph.