Why Banks Offer Only a Few Currencies: The 80/20 Rule in Forex

Why Banks Support Only a Few Currencies

The author, researching bank foreign exchange business, asks why banks offer only a handful of currencies despite the large number of global currencies.

Currency Support Across Major Chinese Banks

Data collected from official bank websites shows variation by bank and business line:

Industrial and Commercial Bank of China (ICBC) : 14 currencies for daily spot FX (USD, HKD, JPY, EUR, GBP, CHF, CAD, AUD, SGD, DKK, NOK, SEK, MOP, NZD); 12 for foreign currency exchange (removing MOP and NZD).

Bank of China (BOC) : 24 currencies for personal foreign currency savings (USD, EUR, JPY, HKD, GBP, CAD, AUD, CHF, SGD, MOP, KRW, RUB, NZD, DKK, NOK, SEK, ZAR, THB, IDR, PHP, BRL, TWD, MYR, INR); 17 for counter foreign currency exchange.

China Construction Bank (CCB) : 9 for foreign cash exchange (USD, EUR, GBP, AUD, CAD, CHF, SGD, HKD, JPY); 8 for foreign currency savings deposits.

Bank of Communications (Hong Kong) : 10 for FX trading (HKD, AUD, CAD, EUR, JPY, NZD, GBP, CHF, USD, CNY).

Agricultural Bank of China (ABC) : 11 for counter foreign currency exchange (USD, EUR, HKD, JPY, GBP, CHF, CAD, AUD, DKK, SEK, SGD).

Postal Savings Bank : no public list found.

Joint-stock commercial banks:

China Merchants Bank (CMB) : 10 currencies for personal spot FX trading (USD, HKD, EUR, JPY, GBP, CHF, CAD, SGD, AUD, NZD); 9 for corporate spot FX (same minus NZD) with 36 currency pairs (8 direct + 28 cross).

Minsheng Bank : 9 for personal FX sale/purchase (USD, EUR, GBP, JPY, HKD, CAD, AUD, CHF, SGD); 8 for personal spot FX trading (EUR, GBP, AUD, USD, CHF, CAD, HKD, JPY).

Everbright Bank : 16 for FX trading/spot settlement (USD, EUR, JPY, HKD, GBP, AUD, CHF, CAD, SGD, SEK, DKK, NOK, THB, MOP, NZD, KRW).

Huaxia Bank : 10 for personal FX purchase/sale (USD, JPY, HKD, GBP, EUR, CAD, CHF, AUD, SGD, SEK).

SPDB : 9 for mobile banking spot FX (USD, EUR, JPY, GBP, CAD, AUD, CHF, HKD, SGD); 21 at Shanghai Pudong/Hongqiao airport branches.

Industrial Bank : 9 for foreign currency deposits (USD, HKD, JPY, EUR, SGD, CAD, CHF, AUD, GBP).

CITIC, Ping An, Zhejiang Commercial, Bohai, Hengfeng : no public lists found.

What Qualifies as Foreign Exchange

Foreign currency is a component of foreign exchange, but not all foreign currencies qualify. A currency must meet three criteria:

Convertibility : freely convertible into other currencies or credit instruments for multilateral payments. Example: RMB cannot be freely converted for cross-border payments, so it is not treated as foreign exchange by other countries.

Repayability : the currency's assets must be guaranteed repayable, requiring the issuing country to have substantial production and export capacity. Counterexample: Zimbabwe dollar lacks repayability.

Internationality : the asset must be denominated in foreign currency and usable for external payments without restriction. For instance, USD is foreign exchange for non-US residents, but domestic USD transactions in the US are not foreign exchange.

Global FX Market Shares (BIS 2025 Triennial Survey)

The Bank for International Settlements' September 2025 survey shows the dominance of a few currencies:

USD: 89.2% (up from 88.4% in 2022)

EUR: 28.9% (down from 30.6%)

JPY: 16.8% (stable from 16.7%)

GBP: 10.2% (down from 12.9%)

CNY: 8.5% (up from 7.0%), now fifth globally

CHF: 6.4% (up from 5.2%)

AUD: ~6% (stable)

CAD: ~6% (stable)

HKD: significant share (exact figure not listed)

SGD: ~2% (stable)

How Banks Choose Currency Pairs

Banks select currencies based on global macroeconomics, regulatory policy, market liquidity, and their own system and operational capacity. Using Minsheng Bank's personal spot FX as an example:

8 tradable currencies: EUR, GBP, AUD, USD, CHF, CAD, HKD, JPY.

7 direct (base) pairs against USD: EUR/USD, GBP/USD, AUD/USD, USD/CHF, USD/CAD, USD/HKD, USD/JPY.

21 cross pairs (non-USD pairs) quoted in a single direction (e.g., EUR/GBP, EUR/AUD, EUR/CHF, EUR/CAD, EUR/HKD, EUR/JPY, GBP/AUD, GBP/CHF, GBP/CAD, GBP/HKD, GBP/JPY, AUD/CHF, AUD/CAD, AUD/HKD, AUD/JPY, CHF/CAD, CHF/HKD, CHF/JPY, CAD/HKD, CAD/JPY, HKD/JPY).

Total 28 currency pairs.

The math: from 8 currencies, the number of unordered pairs is C(8,2) = 28. Although each pair could be traded in two directions (56 theoretical), market convention quotes cross pairs only one way (e.g., EUR/GBP but not GBP/EUR). Customers execute the opposite side by selling the quoted pair. This halves cross-pair count, saving system resources and avoiding spread confusion.

Conclusion

The currency combinations offered by banks are not arbitrary mathematical permutations but highly optimized sets. They retain all major currency–USD pairs (direct pairs) and apply single-direction quoting for cross pairs, while dropping extremely low-liquidity long-tail combinations. Minsheng Bank's 28 pairs cover over 99% of retail FX demand, representing the optimal balance between meeting customer needs and controlling operational cost and risk.