Possibilities are left open for a mixed offering denominated in both the dollar and the yuan that would delay the issuance to early next year.

Offshore yuan hub

In any way, possibility is high for South Korea to issue yuan-denominated sovereign bonds in a foreseeable future as Seoul seeks to become one of the offshore yuan hubs in Asia alongside Hong Kong and Singapore.

Finance Minister Choi Kyung-hwan said in London in June that the South Korean government was "reviewing" the issuance in the second half of this year of yuan bonds "in connection with creating a yuan hub" in the country.

The Bank of Communications, one of China's major commercial banks, was included in the list of six global investment banks selected to arrange the planned sale of the foreign exchange stabilization bonds.

It marked the first time that a Chinese bank was picked to arrange the sale of such bonds, increasing the possibility for yuan bond issuance. The five others were HSBC, Goldman Sachs, Standard Chartered, Citigroup Global Markets and South Korea's Samsung Securities.

Issuing the yuan notes would help prop up South Korea's position as one of the dominant yuan trading hubs in Asia. The government-issued bonds would serve as a benchmark for corporate bonds denominated in the yuan, which would boost the yuan bond sales among South Korean companies.

It would also boost the yuan usage in South Korea's foreign exchange market. Seoul opened a market for direct trading between currencies of South Korea and China in December 2014.

The won-yuan trading volume kept increasing from $0.88 billion in December 2014 to $1.85 billion in March, according to Bank of Korea data. The daily trading between the two currencies more than doubled from $1.39 billion in the first quarter to $3.24 billion in the second quarter.