The South Korean government intends to significantly ease access to the won, aiming to transition its national currency into a “freely convertible currency” over the long term, the Ministry of Finance announced on Sunday. To achieve this, it presented a roadmap for the won’s internationalization. This plan outlines a future where foreigners can acquire and use the currency abroad with fewer restrictions.
According to the Ministry, achieving internationalization first requires completing the systems for offshore won transactions and their processing. Additionally, institutional obstacles must be removed.
The internationalization of the won is deemed necessary to generate several positive outcomes, including the advancement of the capital market and lower transaction costs for businesses. Companies could anticipate reductions in costs related to raising capital, currency exchange, and hedging against exchange rate risks. Furthermore, the impact of currency fluctuations on the real economy is expected to be mitigated.
