Electronification in Emerging Markets: A Quiet Revolution in Interest Rate Swaps

Electronic trading has transformed how financial markets operate, offering speed, precision, and transparency that voice execution simply can't match. While initially designed for highly liquid instruments, these benefits are now reshaping more complex and fragmented markets - including Emerging Markets (EM) interest rate swaps (IRS).

Breaking Through Market Barriers

In EM IRS, structural challenges like geographic dispersion, pricing opacity, and operational inefficiencies have historically made voice trading the norm. But that's changing. Electronic platforms like Tradeweb are enabling more discreet, transparent, and efficient execution, especially through innovations like Request-for-Market (RFM) protocols and automated execution via AiEX.

Tradeweb's RFM protocol, for example, allows for two-way pricing without broadcasting sensitive trade intent, giving clients more control over execution and market impact.

Innovation Pays Dividends

Many Tradeweb client types have embraced these tools decisively. Their high adoption of electronic trading - particularly in EM markets - has resulted in better spread outcomes, more flexible execution, and greater resilience in volatile conditions.

A clear example came in April 2025, when the U.S. announced new tariffs. Instead of reverting to voice, these clients leveraged Tradeweb's real-time data and automation to maintain pricing power. EM IRS volumes on Tradeweb jumped 46% that week, with Asia IRS up 70%, and traders using e-trading innovations consistently outperformed in execution quality.

Data That Speaks Volumes

From October 2024 through end of September 2025, Tradeweb data (Table One) showed that clients using AiEX and RFM protocols in EM IRS achieved better pricing and tighter bid-offer spreads across all trading hours, even into after-market periods. They also led the charge in automation adoption, with 45% of EM IRS trades completed via AiEX, compared to just 8% among other institutional traders.

This trend holds across Latin America, Asia, and CEEMEA, and is now extending to larger trade sizes as confidence in the tools grows.

Table 1*

*The table reflects outright RFM transactions in the below currencies for BMK and IMM issues. The darker blue cells denote high-volume times. Currencies included:

• Asia: CNY, HKD, INR, KRW, MYR, SGD, THB, TWD
• CEEMEA: CZK, HUF, ILS, PLN, ZAR
• Latam: BRL, CLP, COP, MXN

Beyond EM: A Global Shift

In developed markets (DM) like USD or EUR IRS, electronic trading is already well-established. While clients deploying AiEX and RFM continue to perform well there too, the performance gap is narrower due to broader institutional participation and mature infrastructure.

That contrast highlights the unique value proposition of electronification in EM, where early adopters are capturing greater relative benefits.

From Optional to Essential

The message is clear: electronic execution isn't just an alternative - it's becoming the default. With robust data, diverse protocols, and automation tools like AiEX, Tradeweb clients are building smarter workflows, achieving stronger execution, and protecting trading intent in increasingly competitive markets.

As EM IRS markets evolve, so too does the case for digital trading. More adoption drives better outcomes - and better outcomes drive more adoption.