Britain's financial watchdog confirmed it is carrying out its own formal investigation into a number of firms and their foreign exchange trading activities as the currency market probe widens.
The Financial Conduct Authority (FCA) has joined other regulators around the world in scrutinising firms over potential manipulation of the £3 trillion a day forex market, but stressed its investigation was at an early stage and may take some time to conclude.
Taxpayer-backed Royal Bank of Scotland said it had been contacted by the FCA over the issue and was "co-operating fully".
An FCA spokesman said: "We can confirm that we are conducting investigations alongside a number of other agencies both in the UK and abroad into a number of firms relating to trading on the foreign exchange (forex) market.
"As part of this we are gathering information from a wide range of sources including market participants."
Switzerland's financial markets watchdog FINMA revealed earlier this month that it was investigating several of the country's banks over possible currency market manipulation.
Hong Kong and the United States are understood to have also launched their own inquiries.
The FCA said it first sent out letters to firms in April, before launching a formal investigation later.
RBS is understood to handed over electronic messages to the FCA in connection with the investigation.
The bank said: "We can confirm that we were contacted by the FCA on this matter.
"Our ongoing inquiry into this matter continues and we are co-operating fully with the FCA and our other regulators."
Regulators are looking into w hether currency traders shared information about their positions and knowledge of client orders through instant messages to rig the foreign exchange market in their favour.
Currency exchange rates are set on a daily basis by analysing actual trading volumes at leading banks during a short time window.
It is thought that traders could potentially influence exchange rates by pushing through large orders during the 60-second window to make a profit.
Even a small movement in exchange rates could affect the value of investments worldwide, including pension funds.
It threatens to engulf the industry in yet another embarrassing scandal at a time when many financial firms are still battling to restore their reputations following the Libor rigging revelations.
According to the Bank for International Settlements, global foreign exchange activity rose to 5.3 trillion dollars (£3.3 trillion) a day this year, from four trillion dollars (£2.5 trillion) in 2010.
London accounts for the bulk of currency trading, with 41% of global turnover in the market, followed by the United States, which has a 19% share, Singapore with 5.7%, Japan with 5.6% and Hong Kong with 4.1%.