South Korea's central bank took a major stride toward internationalizing the Korean won on Monday, kicking off a trial run of its new BOK Won International Payment Network. This marks the first time the Bank of Korea has operated a payment and settlement system available 24 hours a day, excluding weekends and public holidays, signaling a crucial step to ease access for overseas investors and lay the groundwork for a broader opening of local markets next year.

The trial commenced at 9 a.m. on the 21st, with four domestic commercial banks participating: Kookmin Bank, Woori Bank, Hana Bank, and Shinhan Bank. By roughly 9:30 a.m., two domestic participants had already completed the first test transaction, valued at approximately 1.4 billion won, or around $1 million. The central bank noted that foreign banks will also join the system, though the exact timing for their entry during the trial phase has yet to be confirmed.

According to the rollout plan, the network is slated for full-scale operations in January, with major foreign banks expected to come on board at that point. The core purpose of this settlement network is to allow overseas investors and non-residents to trade the won more freely. Through this platform, foreign investors won't need to go through domestic financial institutions. Instead, they can open accounts with a "Registered Foreign Institution for Won Transactions" (RFI-K) established abroad, enabling them to settle directly in won during their local business hours.

The Bank of Korea emphasized that this is its first payment and settlement network to run around the clock every day, setting it apart from previous systems. The central bank anticipates that this new infrastructure will dramatically improve foreign investor access to won-denominated payment systems and bolster the currency's standing on the global stage.

This trial is a key component of the government's won internationalization roadmap unveiled earlier this year. Those measures are designed to open up South Korea's foreign exchange market to global investors and support efforts to secure an upgrade for Korean stocks to developed market status by MSCI. Building on prior moves to extend trading hours, onshore dollar-won trading shifted to a 24-hour schedule in July. Starting in January, overseas investors will be permitted to trade, transfer, and settle won among themselves outside of Korea, with the new international settlement network serving as a vital pillar of that initiative.

The system is scheduled for roughly three months of trial operations. The Bank of Korea stated it will maintain constant oversight to ensure stable functioning, while pursuing institutional and technical refinements and expanding the roster of participating institutions to contribute to the advancement of the nation's payment and settlement infrastructure.