South Korea and China launch direct won-yuan trading by 2026
South Korea’s central bank has chosen 12 financial institutions to act as market makers for direct trading between the Korean won and the Chinese yuan. The new system will launch in 2026, aiming to streamline currency exchanges without relying on the US bank as an intermediary. Both local and international banks will take part in the initiative.
The Bank of Korea has appointed seven domestic banks to support the won-yuan market. These include KB Kookmin Bank, NH NongHyup Bank, Shinhan Bank, Woori Bank, Industrial Bank of Korea, Hana Bank, and Korea Development Bank. Their role will involve facilitating spot transactions for both interbank deals and customer trades.
Five foreign banks have also been selected to join the programme. The institutions are China Construction Bank, Bank of Communications, Industrial and Commercial Bank of China, Bank of China, and HSBC Holdings. Together with their Korean counterparts, they will provide liquidity to ensure smooth trading operations.
The new framework removes the need for dollar conversion when exchanging won and yuan. This change is expected to reduce costs and simplify cross-border transactions between the two currencies.
The 12 banks will begin their market-making activities in 2026. Their involvement is set to strengthen the direct trading link between the won and the yuan. The move follows efforts to deepen financial cooperation between South Korea and China.
