The government plans to revise its rules governing the use of the won more easily outside the country. According to reports from the Korea Times, the Ministry of Finance and Economy, Bank of Korea, Financial Services Commission, and Korea Securities Depository will announce their plan together. The goal is to transform the won into freely convertible currency.

The daily South Korean newspaper describes it as the largest overhaul of the financial regulation introduced after the Asian financial crisis in 1997. At the core of this project is an infrastructure offshore where foreigners can hold and regulate payments in won at designated institutions abroad. This means that no bank account in South Korea would be needed to access the currency.

The change targets removing operational obstacles currently linking transactions to the presence in the national banking system. The Korea Times cites an example of an investor based in New York. With the new setup, the subject could obtain won and conduct operations during working hours in the US, addressing themselves to a local intermediary registered with authorities.

This mechanism does not only concern operators in finance but also affects non-financial operators such as tourists. According to the provided source, a Japanese tourist might keep his remaining won in a Tokyo-based bank account after returning home. The value could thus continue being held abroad instead of needing to be converted or maintained through a relationship with a bank opened inside the country.

Institutions responsible for regulating the offshore system are required to register rather than undergo authorization before registration. Lee Hyung-ryul, vice-director general for international finance at the Ministry, explained during an information conference cited by the Korea Times that the intention was to prepare a regulated access to the system without adopting the more restrictive model of licensing. The reform is oriented towards capital markets too.

Making the won freely available should facilitate foreign investment in activities denominated in the Korean currency. However, it's unclear which categories of financial instruments will be involved first, nor what specific requirements or obligations apply to external intermediaries. The ultimate goal is expanding the use internationally of this domestic currency.

Authorities believe that greater circulation of the won outside its borders may contribute to increasing South Korea's growth potential. The plan links simplification of transactions with broader economic strategies aiming to increase accessibility and presence of the currency in international relations. A normative framework built up after the Asian crisis when South Korea introduced stricter rules on exchange market would now be modified.

This change involves removing obstacles currently linking transactions to the national banking system. The Korea Times cites as example an investor based in New York who can obtain won and conduct operations during working hours in the US addressing themselves to local intermediary registered with authorities. No bank account opened inside South Korea would be needed to access the currency.

Non-financial operators such as tourists are also affected according to provided source. It remains to define several aspects of implementation. Available reports do not mention start date for the system, list of countries or institutions potentially allowed, nor technical details of regulation.

Nor are specified controls accompanying relaxation of regulations.