'The time is ripe,' BOK chief says, pitching won payment network in Thailand

Bank of Korea Governor Shin Hyun-song signaled his commitment to internationalizing the won on Saturday, declaring that the time has come to move forward — speaking in the very country where Asia's 1997 financial crisis began.

Shin made the remarks at a panel discussion during the 41st G30 Annual International Banking Seminar in Bangkok. "Bangkok is where the Asian financial crisis started in July 1997," he said. "I still remember it vividly."

"Because of that, countries including Korea have been very hesitant to fully liberalize payment and settlement systems and financial markets," he said. "Now the time is ripe."

Shin stressed the central bank's role in cross-border payment systems, noting that a bilateral country-to-country approach becomes increasingly unwieldy as the number of participating nations grows, making early cooperation difficult to achieve. Connecting to a single central hub — such as a central bank — makes the process far more manageable. "Central banks need to play their part in breaking the deadlock," he said.

As an example of that role, Shin introduced the Bank of Korea's won-denominated international payment network, a flagship initiative under the government's broader push to internationalize the won. The system allows foreign financial institutions to settle transactions in won around the clock without holding accounts at domestic banks. The BOK launched a pilot last month with four commercial banks — KB Kookmin Bank, Woori Bank, Hana Bank and Shinhan Bank.

"Overseas banks can offer won accounts and send won from Bangkok to someone in New York," Shin said. "You don't need an account at a Korean bank." He added that testing had just begun and that full operation is set to launch in January next year.

Shin said regulation, not technology, is the key challenge for the network. "The technology is relatively straightforward," he said. "We had to go through the rules one by one — requirements for prior authorization before a transfer and the need for individual identifiers."

He also said the system guarantees monetary unity because all settlements are conducted in central bank money. The remark was interpreted to mean that won held in overseas bank accounts and won held domestically carry equal value, since final settlement in both cases runs through the BOK's network.

Meanwhile, Shin declined to comment on monetary policy, citing a quiet period ahead of the bank's rate-setting meeting on Thursday.