Foreign Investors Will Be Able to Hold Won Abroad Without a Korean Bank Account

Korea is building a settlement system that will let foreign investors hold and use the won outside the country, without opening an account at a Korean bank. The Ministry of Finance and Economy, the Bank of Korea, the Financial Services Commission and the Korea Securities Depository announced the plan jointly on Sunday.

A pilot begins in September, with full launch set for January 2027. The Bank of Korea will operate the system, and overseas institutions that want to take part will register rather than apply for a licence, a lighter process intended to widen participation.

What changes for investors

The practical difference is time zones. An investor in New York currently has to work around Korean banking hours to settle in won. Under the new arrangement they can transact through a designated overseas institution during their own business day, and can keep won in an offshore account after their business in Korea has finished rather than converting out.

Reporting requirements are being loosened alongside it. Thresholds that trigger advance reporting for won-denominated capital transactions have more than doubled, and transactions judged low risk can be reported after the fact instead of before.

Lee Hyung-ryul, deputy director general for international finance, said the aim is an environment where foreign investors can hold and use the won freely.

The trade-off

This is a deliberate change of posture. Korea's foreign exchange rules were written after past crises with the priority of preventing capital flight, and the cost of that caution has been a currency that is awkward to hold. The new approach treats wider international use as a source of growth rather than a risk to be contained.

Officials acknowledge the exposure that comes with it. A currency held more widely offshore can move harder during global financial stress, and the stated mitigations are expanded currency swap lines and monitoring of the offshore market. Whether those hold under pressure is a question the pilot will not answer, since calm conditions test very little.