Peer-to-peer currency deals spread due to weakening won

A peer-to-peer sales listing of 10 $100 bills for 1.49 million won / Captured image from Danggeun Market website

The weakening won is prompting Koreans to pursue peer-to-peer foreign currency trades, in a bid to minimize costs from high exchange rates and bank commission fees, according to market watchers Wednesday.

These transactions mainly take place in online secondhand marketplaces, such as the Danggeun app, as well as online communities originally intended for sharing country-specific travel tips.

The currencies traded range from the U.S. dollar, euro and Chinese yuan to lower-demand units such as Thai baht, reflecting the won’s decline against multiple global currencies.

While the Bank of Korea (BOK) has not compiled official data, market observers said sellers are typically those who recently purchased foreign currency and now wish to convert it back to won. The gap between the rate at which they purchased and the won’s current value does not necessarily yield a profit once commission fees are deducted.

For buyers, peer-to-peer trading allows them to purchase foreign currencies at rates below the official level while avoiding commission fees.

Exchanging $1,000 at 1,480 won per dollar would cost 1.48 million won through peer-to-peer trading, compared with 1.51 million won at a bank, after the 1.75 percent fee.

“Although I do not consider nonconventional currency trading recommendable, the trend may persist and even deepen as the Korean won continues to depreciate against a range of currencies,” an economist said on condition of anonymity.

The economist referred to the won’s performance since the second half of 2025, noting that it declined from around 1,350 won per dollar to the 1,440 level, from 189 won per yuan to the 200 level, and from about 1,590 won per euro to the 1,700 level.

The Korean currency also fell compared to several other currencies. Over the same period, the won declined from around 41 won per baht to 46 and from around 172 won per Hong Kong dollar to 185.

The Japanese yen and the Vietnamese dong were among the few currencies against which the won was relatively unchanged.

Asked whether peer-to-peer trading can influence the foreign exchange market, Inha University economics professor Shin Il-soon said, “The scale of these transactions is unlikely to significantly affect the official exchange rate.”

Shin pointed out that transactions should not come under scrutiny as long as they do not exceed $5,000 — the cap set by financial regulators for transactions to be exempt from reporting to the authorities — and do not seek significant profit.

The Financial Supervisory Service said overseeing every peer-to-peer transaction is not feasible, while market observers warned that traders may face risks from counterfeit notes, scams and other crimes.

Danggeun Market, the operator of Danggeun, said it has established its own rules to prevent the misuse of foreign currency transactions on its platform, limiting individual transactions to under $1,000.