RBC Capital Markets has become the first Canadian bank to directly trade the Korean won (KRW) onshore, expanding cross-border currency access and deepening financial ties between Canada and South Korea. The milestone, confirmed by the bank, allows RBC to execute won-denominated transactions within Korea’s regulated foreign exchange market — a privilege previously limited to a select group of international institutions — and comes as BCA Research identifies a tactical trading opportunity in the won, arguing it is undervalued relative to fundamentals.
Onshore KRW trading has historically been restricted to domestic Korean banks and foreign institutions meeting strict criteria set by the Korean Ministry of Economy and Finance and the Bank of Korea. By securing approval, RBC can offer institutional clients direct access to the won market, moving away from offshore non-deliverable forward (NDF) contracts. This shift reduces counterparty risk, improves pricing transparency, and aligns with South Korea’s ongoing efforts to internationalize the currency — including a possible future inclusion in the IMF’s Special Drawing Rights basket.
The move also reflects strategic Canadian demand: bilateral trade between Canada and South Korea exceeded $16 billion in 2023, and direct financial integration had lagged. Canadian pension funds, asset managers, and corporations now have a more efficient path into Korea’s $2 trillion bond market and its equities. RBC’s Seoul branch, operating since 2011, provided the operational foundation for this expansion.
Meanwhile, global macro research firm BCA Research sees the won as increasingly disconnected from fundamentals. Despite robust export growth, a current account surplus, and ample foreign reserves, the won has weakened beyond what the firm considers fair value, driven by short-term sentiment tied to Federal Reserve policy and geopolitical tensions. BCA frames this as a contrarian, tactical opportunity — not a structural trade — recommending disciplined entry points and stop-loss measures for potential longs on the KRW or shorts on USD/KRW.
The convergence of RBC’s market access breakthrough and BCA’s valuation call highlights a turning point for the Korean won in global markets. While no crypto-native impact is evident, the developments could influence broader investor sentiment toward Asian emerging-market currencies and assets.
