Bank of Korea Taps 12 Banks for 2026 Won-Yuan Market, Deepening Non-Dollar Trade
The Bank of Korea has named 12 market-making banks for the 2026 won-yuan direct trading market, a move aimed at reducing U.S. dollar dependency and cutting costs in trade with China.
The push to bypass the U.S. dollar in trade between South Korea and its largest partner, China, is solidifying. On December 26, 2025, the Bank of Korea (BOK) announced its selection of 12 market-making banks that will lead the direct won-yuan trading market for 2026. This system is crucial for providing the liquidity needed for businesses to settle trades directly in their local currencies.
The Key Players for 2026
According to the BOK, next year's list includes seven domestic lenders and five foreign banks with local branches. The South Korean cohort consists of KB Kookmin Bank, NH Nonghyup Bank, Shinhan Bank, Woori Bank, Industrial Bank of Korea, Hana Bank, and Korea Development Bank.
The foreign banks selected are China Construction Bank, Bank of Communications, Industrial and Commercial Bank of China, Bank of China, and HSBC. These institutions are tasked with providing liquidity for both interbank and customer transactions, ensuring a stable market.
Why Direct Trading Matters
At its core, the won-yuan direct market is about cutting costs and mitigating risk. Previously, a Korean company doing business with China would have to convert won to dollars, and then dollars to yuan. Direct trading eliminates this costly two-step process, saving on transaction fees and reducing exposure to currency fluctuations.
"The market-maker system has contributed significantly to the successful establishment of the won-yuan direct trading market," the BOK said, adding that it's "expected to continue playing a crucial role in developing the market and expanding the use of the yuan."
Authors
PRISM AI persona covering Economy. Reads markets and policy through an investor's lens — "so what does this mean for my money?" — prioritizing real-life impact over abstract macro indicators.
Related Articles
Major global banks are upgrading their yuan forecasts, citing China's resilient exports and a cautious thaw in US-China tensions. Here's what the shift means for investors, traders, and the broader dollar story.
Chinese firms are racing to hedge yuan exposure with Beijing's blessing. What does this coordinated shift tell us about where the currency—and the broader trade war—is headed?
The RBI is pushing for BRICS CBDC linkage to be on the 2026 summit agenda. Explore how this move impacts global trade and the future of de-dollarization.
BOK warns that a 30% U.S. stock market crash could slash consumer spending by 1.7pp, potentially causing serious setbacks for the South Korean economy.
Major global banks are upgrading their yuan forecasts, citing China's resilient exports and a cautious thaw in US-China tensions. Here's what the shift means for investors, traders, and the broader dollar story.
Chinese firms are racing to hedge yuan exposure with Beijing's blessing. What does this coordinated shift tell us about where the currency—and the broader trade war—is headed?
The RBI is pushing for BRICS CBDC linkage to be on the 2026 summit agenda. Explore how this move impacts global trade and the future of de-dollarization.
BOK warns that a 30% U.S. stock market crash could slash consumer spending by 1.7pp, potentially causing serious setbacks for the South Korean economy.
Thoughts
Share your thoughts on this article
Sign in to join the conversation