South Korea unveiled its 2026 economic growth strategy report on Friday, announcing the formal introduction of round-the-clock foreign exchange trading this July, alongside plans to ease restrictions on offshore transactions in September. These represent the nation's latest measures to secure developed market status from MSCI (Morgan Stanley Capital International), aiming to eliminate market access barriers for global investors by extending trading hours and relaxing regulations, marking a crucial step forward in the internationalization of the Korean won. According to the plan outlined by South Korea's Ministry of Economy and Finance, the proposed 24-hour trading mechanism will eliminate the time gap caused by the current market closure at 2 a.m. Seoul time, and is expected to boost trading volume. This initiative is part of years of effort by South Korea to shed its "emerging market" label. A successful upgrade to "developed market" status would not only elevate the country's standing as a regional financial powerhouse but is also anticipated to attract billions of dollars in passive fund inflows. Korean regulators are actively pushing for a shift from control to openness. Beyond extending trading hours, the government will also phase in an offshore Korean won settlement system and relax requirements for foreign institutions regarding trading and sales entities. Previously, progress in loosening currency trading controls had been slow, largely due to the painful experience of massive foreign capital flight during the 1997 Asian financial crisis. Authorities now explicitly state that the country currently faces no significant external risks, making the implementation of 24-hour trading feasible. To ensure sufficient market liquidity during the extended trading hours, South Korea's Ministry of Finance will introduce an offshore Korean won settlement system. Under the new rules, foreign investors will be permitted to trade with each other through intermediaries, while the Bank of Korea will continue to handle final settlement. In the initial phase, only Registered Foreign Institutions (RFI) with high market participation and the capability to support after-hours trading will be eligible to act as such intermediaries. The scope of participants will be gradually expanded in phases. This reform will allow foreign investors to freely trade and obtain Korean won, activities that were previously not permitted. Furthermore, the government is prioritizing regulatory relaxation and liquidity-boosting measures for the extended trading session. These initiatives will launch as a pilot in September and, with few exceptions, will be fully rolled out next year. The South Korean government is lowering the entry threshold for foreign institutions. While booking entities will still need to fulfill registration and reporting obligations, requirements for trading and sales entities will be relaxed in the coming months. Newly registered foreign institutions (RFI) can begin trading this month and will be exempt from reporting requirements for the first three months. Concurrently, the government will immediately introduce omnibus accounts for institutional investors to optimize the management of settlement accounts. Previously, these accounts had to be opened fund-by-fund, a cumbersome process; going forward, they will be handled uniformly by asset management companies or global custodians, significantly reducing paperwork and setup time. The announced measures represent a further deepening of market reforms, following the extension of trading hours until 2 a.m. in July 2024. Although the previous extension did not lead to a significant change in trading volume, the South Korean government emphasized that these steps are not one-off actions. Kim Hee Jae, an official from the Ministry of Economy and Finance, stated during a briefing that this is "the first step in the internationalization of the Korean won," adding that a roadmap for won internationalization will be released in the first half of this year, with more measures to follow. South Korea's desire for developed market status dates back to at least 2008, when MSCI placed it on a watch list before subsequently removing it. South Korea's current market classification remains an emerging market. Kim noted that the country has long maintained restrictive foreign exchange markets due to past currency crises but is now striving to overcome this historical shadow.