A Bank of Korea study finds that dollar-backed stablecoins can pull down local currencies once investors gain direct access to fiat-stablecoin trading pairs. The effect showed up in currencies where Binance added local-currency pairs for tokens such as USDT and USDC, while South Korea's won showed no such measurable move because it lacks a direct pair.
Demand for dollar-backed stablecoins can place downward pressure on national currencies once investors receive direct access through fiat trading pairs, according to research published by the Bank of Korea on Sept. 3. The effect appeared after Binance introduced trading between selected local currencies and stablecoins such as USDT and USDC.
Binance pairs linked stablecoin demand to FX markets
The study, written by Jihyun Kim and Sangheum Cho, examined 12 currencies using pairing events between 2019 and 2025. Before direct pairing, buying pressure mainly affected the domestic stablecoin premium; afterward, some of that pressure passed into the exchange rate.
A market maker selling USDT for Brazilian reais receives reais while giving up a dollar-linked asset. To rebalance, it can sell the reais and buy dollars in the FX market, so stablecoin buying demand can generate an accompanying sale of the local currency. The researchers found that net buyer-initiated stablecoin order flow was associated with depreciation among paired currencies.
Local premiums fell after direct trading opened
Local stablecoin premiums also declined by approximately 0.33 to 0.38 percentage points following the introduction of Binance fiat pairs, as global liquidity providers could respond when domestic demand pushed prices above levels seen elsewhere. Stablecoins tended to move from Binance into local exchanges when domestic premiums exceeded prices on Binance, supporting price arbitrage across venues.
In a separate weekly test using Google search activity as a proxy for crypto interest, the researchers found that a one-standard-deviation increase in Bitcoin searches was associated with a 0.118% depreciation of the Brazilian real and a 0.109-percentage-point increase in Brazil's stablecoin premium.
Korea's unpaired market absorbed demand through premiums
South Korea offered a contrast because Binance did not offer a direct won-stablecoin pair during the period studied. The researchers found no statistically measurable relationship between stablecoin buying pressure and the won's exchange rate; instead, stronger demand mainly raised the price premium for stablecoins inside the Korean market.
Won-denominated purchases of stablecoins still reached about $64 billion during the 12 months through June 2025, according to Chainalysis data, which described South Korea as Asia-Pacific's largest local-currency stablecoin market during that period. The Bank of Korea said the relationship could change if the country expands access for corporations and foreign investors, a view that remains forward-looking since Korea has not yet built the direct trading structure used in the paired markets.
No new rule or trading pair was announced alongside the study. Its main contribution is evidence that exchange design determines whether stablecoin demand stays a crypto-market premium or moves into conventional foreign-exchange markets.
Source: Bank of Korea
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