Won Goes Global
South Korea launches roadmap to make won a freely convertible currency by 2027.
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Key Points
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Foreigners will be able to trade the won without local bank accounts starting in 2027, with the removal of the requirement to maintain local accounts for won transactions. The plan allows pre-registered foreign firms to transfer with minimal reporting (except for domestic real estate), and a pilot phase begins this September ahead of full implementation in 2027.
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The benchmark exchange rate methodology will shift from MAR to a time-weighted average price (TWAP), and electronic foreign-exchange guidelines will be introduced in August to support automated overnight trading.
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Officials plan to steer activity away from offshore non-deliverable forwards (NDF) toward deliverable forwards (DF), with incentives for DF transactions and a September plan to start offering these incentives to FX banks.
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The roadmap includes establishing offshore won settlement infrastructure, enabling foreigners to hold and use won accounts at overseas institutions (such as JPMorgan and Mitsubishi), and offering favorable rates on won-denominated government contracts in areas like defense and nuclear purchases.
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While internationalization is expected to lower transaction and hedging costs and bolster capital markets, officials acknowledge it could transmit global shocks to the domestic economy, necessitating a multilayered risk-management framework.
South Korea has unveiled a sweeping plan to make the won a freely convertible currency, opening it to global investors around the clock. The "Won Internationalization Roadmap," released jointly by the Finance Ministry and Bank of Korea, lets foreigners trade won 24 hours a day without needing a local bank account, according to Seoul Daily.
A pilot program launches this September. Full implementation is set for 2027. Officials say the move will lower costs for businesses and deepen South Korea's capital markets — though they warn it could also expose the domestic economy to global shocks.
Foreigners Can Trade Won Without a Korean Bank Account
Starting in 2027, foreigners will no longer need a local South Korean account to trade the won. Instead, they can use overseas institutions — such as JPMorgan or Mitsubishi — that register with the Korean government, according to The Edge Malaysia. Transfers through these pre-registered firms will require minimal reporting, except for domestic real estate deals.
A pilot phase begins in September 2025 ahead of the full rollout. Whalesbook reported that the plan targets global institutional investors and aims to bring South Korea in line with more developed financial markets. Officials also plan to offer favorable won-denominated rates on government contracts in areas like defense and nuclear energy purchases.
Benchmark Pricing Overhaul and Round-the-Clock Trading
South Korea has already launched a 24-hour foreign exchange market. Now it is changing how the benchmark exchange rate is calculated. The current method — called MAR — will be replaced by a time-weighted average price, or TWAP. TWAP spreads the measurement across a time window rather than a single moment, making prices harder to manipulate.
Electronic foreign exchange guidelines will be introduced in August to support automated overnight trading. These rules will help algorithms and trading systems operate smoothly during off-hours, according to BigGo Finance. Together, the changes are designed to make the won market more transparent and accessible around the world.
Shifting from NDF to Deliverable Forwards to Cut Volatility
A core goal of the roadmap is steering currency trading away from non-deliverable forwards, or NDFs. NDFs are contracts settled in dollars, not won — they exist largely because the won was not freely tradable offshore. Officials want to replace them with deliverable forwards, or DFs, which settle directly in won, according to Seoul Daily.
The government plans to offer financial incentives for DF transactions starting in September. FX banks will be the first to receive these incentives. Officials believe shifting to DFs will reduce currency volatility and give businesses better tools to hedge their exposure to exchange rate swings, Whalesbook reported.
Benefits Are Real, But So Are the Risks
Officials expect internationalization to lower transaction and hedging costs for South Korean businesses operating abroad. Deeper won liquidity should also attract more foreign capital into Korean stocks and bonds, strengthening the country's capital markets. TradingView noted that the roadmap is part of a broader push to align with global financial standards.
But the government acknowledges a real downside. Larger cross-border money flows can carry global shocks directly into the domestic economy. To manage this, officials say they will build a "multilayered risk-management framework." The details of that framework have not yet been fully disclosed, according to The Edge Malaysia.
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