BIS Triennial Survey 2025: FX and Derivatives Markets Hit Record $9.5 Trillion Daily

What the BIS Triennial Survey Reveals About FX Markets

The BIS Quarterly Review December 2025 delivers a landmark analysis of global FX derivatives markets through the lens of the 2025 BIS Triennial Survey. Conducted every three years by the Bank for International Settlements, this survey collects trading data from more than 1,000 banks across 52 jurisdictions, making it the most authoritative snapshot of foreign exchange and over-the-counter derivatives activity worldwide.

The December 2025 edition arrives at a pivotal moment for global financial markets. Unprecedented policy uncertainty, sweeping tariff announcements, and the completed transition away from LIBOR have fundamentally reshaped how institutions trade currencies and manage interest rate risk. The survey period captured the dramatic April 2025 FX surge, providing unique insight into how markets behave during periods of acute stress and hedging demand.

For investors, risk managers, and policymakers, the findings carry profound implications. FX turnover now stands at roughly 30 times global GDP and 72 times the volume of world trade — a ratio that has doubled since the early 1990s. Understanding these structural shifts is essential for anyone navigating modern financial markets, and platforms like Libertify’s interactive library make complex research like this accessible through engaging, audio-visual experiences.

Global FX Turnover Reaches $9.5 Trillion Daily

The headline figure from the 2025 BIS Triennial Survey is staggering: average daily FX turnover reached $9.5 trillion in April 2025, up 27% from $7.5 trillion in April 2022. This represents a net increase of over $2 trillion in daily trading activity — a growth rate that underscores the continued expansion of global currency markets despite periods of geopolitical turbulence.

To put this in historical perspective, global FX turnover was just $539 billion per day in 1989 when the BIS first began conducting the triennial survey. The journey from half a trillion to nearly ten trillion dollars reflects decades of financial globalization, technological innovation, and the growing sophistication of hedging strategies employed by institutional investors.

The composition of FX trading has also evolved considerably. Spot transactions accounted for $2.95 trillion daily (31% of total turnover), growing 42% from 2022. Outright forwards reached $1.75 trillion (18% share), surging 51%. FX swaps remained the largest segment at $4.02 trillion (42% share), though their growth was more modest at 6%. The most dramatic shift came in FX options, where turnover more than doubled with 108% growth to $632 billion daily — a clear reflection of heightened demand for hedging instruments.

This breakdown reveals a market increasingly driven by risk management rather than speculative positioning. The explosive growth in options and forwards, relative to the more stable FX swap market, indicates that institutions are actively seeking new ways to protect against currency volatility. For a deeper exploration of how financial market structures evolve, explore our interactive financial research library.

FX Derivatives Markets and the April 2025 Surge

The April 2025 FX derivatives markets experienced an extraordinary episode of volatility and trading activity directly linked to US tariff announcements and the resulting dollar depreciation. The BIS estimates that approximately $1.5 trillion in excess daily turnover was generated by tariff-related activity — with spot trading accounting for roughly $1.1 trillion of that excess, forwards contributing $400 billion, and FX swaps adding $130 billion.

Institutional investors were at the center of this surge. Spot turnover with institutional investors nearly doubled from 2022 levels, surpassing $440 billion in daily volume. Options turnover with this group surged by more than 150%, while even hedge fund trading in options doubled during the period. These figures highlight how the April 2025 episode was fundamentally a hedging event rather than a speculative blow-off.

The counterparty data paints an equally revealing picture. Other financial institutions — including non-reporting banks, institutional investors, and hedge funds — contributed 53% of the total growth in FX turnover. Non-reporting banks saw their spot and forward trading grow by 57% and 132% respectively, each adding approximately $200 billion in daily volume. Meanwhile, non-financial customers contributed just 1% of the increase, their turnover growing a mere 3% to $441 billion.

The concentration of growth among financial intermediaries rather than corporate end-users suggests that much of the increased activity represents inter-dealer hedging and portfolio rebalancing flows rather than new underlying commercial demand. This has important implications for market liquidity, as the BIS Triennial Survey methodology notes.

Currency Trading Breakdown: Winners and Losers

The 2025 BIS Triennial Survey reveals significant shifts in currency composition that reflect evolving global economic dynamics. Emerging market economy (EME) currencies have steadily increased their collective share of global FX turnover to 29% in April 2025, up from 26% in 2022 and less than 10% in the early 2000s. Average daily EME FX trading now reaches $2.8 trillion, underscoring the growing importance of these markets in global finance.

The most notable winner in the currency rankings is the Chinese renminbi, which has climbed to become the 5th most traded currency globally with an 8.8% share of turnover, up from 7.0% in 2022. The USD/CNY pair has overtaken USD/GBP to become the 3rd most traded currency pair worldwide — a milestone that reflects China’s deepening integration into global financial markets. Proprietary trading firms and hedge funds now account for 8% of CNY activity, in line with the global average, suggesting the currency has matured beyond its traditional role in trade settlement.

The Hong Kong dollar also registered impressive gains, rising to 3.8% of global turnover from 2.5% in 2022. The Singapore dollar maintained its position at 2.4%, while the Indian rupee edged up to 1.9%. Notably, 96% of all CNY transactions remain against the US dollar, highlighting the bilateral nature of renminbi trading and its continued dependence on the dollar as a vehicle currency.

These trends carry significant implications for FX market infrastructure. As EME currencies gain share, questions about clearing capacity, liquidity provision, and regulatory frameworks become increasingly urgent. The BIS report highlights that concentration of clearing remains a particular challenge for EME OTC interest rate derivatives markets.

Interest Rate Derivatives After LIBOR

Perhaps the most transformative finding in the BIS Quarterly Review December 2025 concerns the interest rate derivatives (IRD) market, where the completed transition from LIBOR to risk-free reference rates has catalyzed an unprecedented expansion of trading activity. Global IRD turnover reached $25 trillion per day in April 2025, combining both OTC and exchange-traded instruments — an 87% increase from the April 2022 survey.

OTC interest rate derivatives turnover alone reached $7.9 trillion daily, growing 59% from 2022. Exchange-traded IRD turnover was even larger at $17.4 trillion per day, reflecting the explosive growth of futures markets in the post-LIBOR landscape. The exchange-traded segment now accounts for nearly 70% of total IRD turnover, a structural shift that has significant implications for transparency, clearing, and systemic risk monitoring.

The composition of OTC IRD trading has been fundamentally altered by the LIBOR transition. Overnight index swaps (OIS) now represent 65% of global OTC IRD turnover, up from 42% in 2022. In currencies that have fully adopted risk-free rates — including the US dollar, British pound, Swiss franc, and Canadian dollar — OIS accounts for over 90% of all swap turnover. Even in the euro zone, where the transition has been more gradual, OIS has risen to 53% of interest rate swap turnover.

The currency breakdown reveals divergent growth patterns. Euro-denominated IRD turnover nearly doubled, reaching approximately $3 trillion per day and making the euro the largest single-currency IRD market. US dollar IRD turnover remained relatively stable at around $2.3-2.4 trillion, while Japanese yen IRD turnover surged more than sixfold from 2022, driven by the Bank of Japan’s historic policy normalization.

The Rise of Basis Trading and Hedge Fund Strategies

One of the most consequential developments documented in the BIS Triennial Survey is the dramatic expansion of cash-futures basis trading in US Treasury markets. This strategy — which involves buying cash Treasury bonds while simultaneously selling equivalent Treasury futures — has become a dominant force in fixed income markets since the LIBOR transition eliminated the traditional interest rate benchmark arbitrage.

The numbers are striking. Total notional of US Treasury futures positions reached approximately $1.2 trillion in 2025, against roughly $21 trillion in total US Treasuries outstanding net of Federal Reserve holdings. Asset managers have more than quadrupled their net long positions in Treasury futures since 2022, with hedge funds expanding their corresponding net short positions commensurately. SOFR futures alone — both one-month and three-month contracts — now generate $4.5 trillion in daily turnover, representing more than one-third of global exchange-traded IRD activity.

Federal funds futures add another $2.1 trillion in daily turnover, further illustrating the concentration of trading activity around US interest rate benchmarks. This concentration creates potential vulnerabilities. Heavily leveraged hedge funds finance their basis trade positions through the repo market, and sudden unwinding — triggered by margin calls or repo rollover failures — could pressure longer-dated Treasury securities precisely when market stability is most needed.

The BIS report draws explicit parallels to the March 2020 market stress, when similar basis trade unwinding amplified Treasury market dislocations. The Federal Reserve’s decision to halt its balance sheet reduction in December 2025 was partly motivated by concerns about repo market strains driven by these leveraged positions.

EME Currencies and the Renminbi Revolution

The continued rise of emerging market currencies in global FX derivatives markets represents one of the most significant structural trends captured by the BIS Triennial Survey. With EME currencies now commanding 29% of global FX turnover and daily trading volumes reaching $2.8 trillion, these markets have moved from the periphery to become a core component of the global trading ecosystem.

The renminbi’s trajectory is particularly noteworthy. Beyond its climb to 5th place in currency rankings, the CNY has experienced a qualitative transformation in its trading profile. The share of proprietary trading firms and hedge funds in CNY activity has risen to 8%, matching the global average for the first time. In Hong Kong, this figure reaches 11%, indicating that the renminbi is increasingly attracting speculative and systematic trading flows alongside traditional commercial hedging.

The geographic dispersion of renminbi trading is also evolving. While Hong Kong remains the primary offshore trading center, London has seen its share of CNY forward trading via electronic brokers double from 14% to 28% between 2022 and 2025. This diversification of trading venues supports deeper liquidity and more robust price discovery, though it also raises questions about the coordination of oversight across jurisdictions.

For other EME currencies, the growth story is more nuanced. While overall EME FX volumes have increased substantially, the BIS report highlights that concentration in clearing and limited availability of hedging instruments remain significant challenges. OTC interest rate derivatives turnover in EME currencies reached $500 billion daily in April 2025, but the EME share in OTC IRD markets remains at just 5% — far below their weight in global trade and GDP.

Electronic Trading and FX Derivatives Market Microstructure

The 2025 BIS Triennial Survey provides granular data on how FX derivatives markets are actually transacted, revealing a market where electronic execution has plateaued while execution methods are quietly restructuring. Electronic trading accounted for 59% of global FX turnover in April 2025, virtually unchanged from 2022 — a surprising stabilization after decades of steady growth.

Beneath this headline stability, however, the composition of electronic trading has shifted meaningfully. Direct electronic trading (primarily through single-bank platforms) declined by 3 percentage points to 33% of total turnover, while indirect electronic trading through venues grew by 3 percentage points to 26%. Within the indirect segment, disclosed venues (where counterparty identities are known) gained 2 percentage points to reach 16% of turnover, while anonymous venues added 1 percentage point to reach 10%.

Voice trading, while often considered a declining execution method, maintained a notable 38% share of FX turnover. Voice direct trading fell 3 percentage points to 25%, while voice indirect gained 1 percentage point to 13%. The resilience of voice execution reflects the complexity of many FX transactions — particularly large-size hedging flows and structured products — that continue to benefit from human intermediation and relationship-based liquidity provision.

The electronification of different FX instruments also varies considerably. Spot trading leads at approximately 72% electronic execution, followed by forwards at 52%, FX swaps at 35%, currency swaps at 18%, and options at just 15%. The relatively low electronic penetration of swaps and options reflects both the complexity of these instruments and the bespoke nature of many institutional hedging transactions. A key structural feature is that internalisation ratios — the proportion of client flows matched internally by dealers without accessing external markets — reached upwards of 80% across all currencies in major FX trading hubs, with G10 currency ratios even higher. This concentration of liquidity within large dealer banks has important implications for market transparency and resilience, as documented by Federal Reserve research on FX market microstructure.

Geographic Shifts in FX Derivatives Markets Trading

The BIS Quarterly Review December 2025 documents meaningful geographic shifts in where derivatives are traded, with implications for market regulation and systemic risk monitoring. In OTC interest rate derivatives, the United Kingdom maintained its dominant position with 50% of global turnover in April 2025. However, the euro area made notable gains, with turnover at sales desks in euro area countries reaching $1.2 trillion per day — nearly doubling from $610 billion in 2022.

The euro area’s share of global OTC IRD turnover rose from 11% to 14%, driven predominantly by Germany. Within euro area countries’ euro-denominated IRD trading, Germany’s share surged to 58% — a more than twofold increase that reflects the post-Brexit migration of euro derivatives trading from London. London’s share of euro-denominated IRD turnover edged down from 69% to 67%, while euro area countries collectively gained from 31% to 33%.

These geographic shifts have accelerated since Brexit and are likely to continue as European regulators push for more euro-denominated clearing and trading activity to be conducted within EU jurisdiction. The implications extend beyond regulatory convenience — the location of trading activity affects which central banks can provide emergency liquidity during market stress and which supervisory authorities have real-time visibility into systemic risk buildup.

For FX markets specifically, the hedging cost landscape has evolved significantly. USD forward premiums rose sharply during the rate-hiking cycle, with the 3-month EURUSD FX swap rate climbing from 0.7% to 3.5% and the USDJPY equivalent surging from 0.3% to 5.5% between January and December 2022. These elevated hedging costs prompted institutional investors globally to reduce their hedge ratios — Japanese life insurers from roughly 60% to 40%, Dutch pension funds from 30% to 25%, and Australian superannuation funds from near 30% to 20%.

Implications for Investors and Risk Management

The 2025 BIS Triennial Survey paints a picture of FX and interest rate derivatives markets that are larger, more complex, and more interconnected than ever before. For investors and risk managers, several key implications emerge from this comprehensive analysis of global FX derivatives markets activity.

First, the dominance of hedging flows over speculative activity suggests that FX market volatility may increasingly be driven by institutional portfolio rebalancing rather than directional bets. The April 2025 episode demonstrated that tariff-driven uncertainty can generate massive hedging demand virtually overnight, creating liquidity challenges even in the world’s deepest currency markets. Risk managers should stress-test their hedging strategies against scenarios of simultaneous hedging demand across multiple asset classes.

Second, the concentration of interest rate derivatives activity in exchange-traded SOFR and Fed funds futures creates new forms of systemic risk. With SOFR futures alone generating $4.5 trillion in daily turnover and hedge funds running approximately $1.2 trillion in Treasury futures positions, the potential for basis trade unwinding to amplify market stress remains a live concern. Portfolio managers should understand their direct and indirect exposure to these leveraged strategies through counterparty and collateral chains.

Third, the rise of EME currencies — and the renminbi in particular — as major components of global FX turnover demands that international investors develop more sophisticated approaches to emerging market currency risk. With 29% of global FX volumes now in EME currencies and clearing infrastructure still developing, the gap between trading activity and risk management capability creates vulnerability.

Finally, the geographic fragmentation of derivatives trading between London and continental European centers adds operational complexity for firms managing cross-border portfolios. Understanding where your derivatives are traded, cleared, and reported has become a critical component of operational risk management.

The BIS Triennial Survey ultimately serves as both a comprehensive reference and a warning: as markets grow in size and complexity, the infrastructure supporting them must evolve in tandem. For professionals seeking to stay current with these developments, transforming dense research reports into interactive formats can dramatically improve comprehension and retention.