Shin Hyun-sung, Governor of the Bank of Korea, announced efforts to internationalize the BOK-Wire payment system to enhance cross-border payment systems.
On October 17, during the G30 International Banking Seminar held in Bangkok in conjunction with the G20 and International Monetary Fund (IMF) annual meetings, Governor Shin made these remarks.
He noted that since the 1997 Asian financial crisis, South Korea and several other countries have hesitated to liberalize payment systems and financial markets, but he believes the time has come. The Bank of Korea is currently trialing its international payment system, BOK-Wire.
"You do not need to have an account with a Korean bank. Foreign banks can open won accounts, allowing for remittances in won from Bangkok to anywhere in New York," he explained, adding that testing has just begun, with a formal launch planned for January.
He emphasized that since all payments will be made in central bank currency, it will ensure currency uniformity. He urged central bank governors from abroad to play their roles in resolving the deadlock in the payment sector.
"Currency uniformity is absolutely essential," he added, stressing the importance of accuracy in the wholesale finance sector through this uniformity.
Regarding the risks to financial stability posed by the spread of artificial intelligence (AI), he expressed concern that similar behaviors among financial institutions could amplify market shocks.
He likened AI to a "very clever black box," pointing out that the lack of transparency is a familiar issue that has contributed to past financial crises.
To address these challenges, he stated that traditional measures such as capital and leverage limits and collateral have been established. He noted that reducing leverage, increasing capital, and strengthening safeguards would allow market participants to respond in diverse ways.
* This article has been translated by AI.
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