An increasing number of participants in the foreign exchange (FX) market—including banks, asset managers, and corporations—are aligning with international standards set by the Global Foreign Exchange Committee (GFXC). This trend has seen a notable rise in engagement from regions such as Southeast Asia, the Middle East, and Africa.
Gerardo Garcia, chair of the GFXC and general director of central banking operations at the Bank of Mexico, told The Business Times that Southeast Asia has shown particularly strong involvement. He highlighted Thailand’s growing engagement and praised Singapore—host of the latest meeting—for its consistent commitment.
Encouraging signs have also emerged from India, the Middle East, and Africa, he noted. These comments followed a two-day GFXC meeting in Singapore (July 3–4), hosted by the Monetary Authority of Singapore, DBS, and UBS.
The gathering marked the committee’s first since it released an updated version of the FX Global Code in December 2024, following a three-year review. The Code offers a unified set of best practices and guidance that FX market participants are encouraged to adopt.
As of the most recent update, the GFXC’s Global Index of Public Registers recorded 1,328 statements of commitment, with 37 new members joining in 2024 alone. The committee now aims to increase engagement from buy-side firms.
“Most new signatories have been from the sell-side, so we need to ramp up our outreach,” Garcia said. He added that the committee is developing initiatives to connect more closely with asset managers, pension funds, and hedge funds—an area that will remain a strategic focus.
Navigating Market Challenges
The FX market is currently contending with macroeconomic headwinds, trade tensions, policy uncertainties, and a weakening U.S. dollar. The greenback declined by around 11% in the first half of 2025—its worst performance for the period since 1973.
Commenting on market volatility, Garcia noted that the FX market has remained resilient. “Even with bouts of volatility over the past six months, the market has held up well,” he said, citing continued liquidity and product development across Asia despite occasional tight conditions.
While market fragmentation poses visibility challenges, Garcia argued it also offers more sources of liquidity. “It adds complexity but also creates more venues for access,” he remarked.
Digital Innovation and Regulation
The FX landscape is evolving with the rise of central bank digital currencies (CBDCs), tokenised assets, cryptoassets, and AI-powered trading systems. Garcia emphasized that these technologies have mostly improved efficiency rather than increased risks.
“Technology helps make settlement faster and more efficient,” he said, while calling for strong regulation of emerging tools like stablecoins.
Committee co-vice-chair Simon Manwaring added that these innovations could enhance settlement safety, while Stuart Simmons reaffirmed GFXC’s commitment to fostering a fair and transparent FX market for all participants. He stressed the importance of continued outreach and awareness-building around the FX Global Code.
