An investigation by the Bank of Korea indicates that appetite for dollar-linked stablecoins can drive sovereign currencies downward once international trading platforms permit users to purchase these digital assets directly using fiat money.
Authored by investigators Jihyun Kim and Sangheum Cho, the research explored events following Binance’s integration of direct exchange markets between fiat denominations, such as the Brazilian real, and dollar-anchored stablecoins including USDT and USDC.
Such listings enable market participants to acquire stablecoins via domestic legal tender while professional liquidity providers deliver the tokens. These market operators subsequently possess a motivation to divest the domestic currency and acquire U.S. dollars within foreign exchange channels to rebalance their inventory holdings.
This mechanism established a pathway through which stablecoin demand actively influenced currency valuations.
The authors discovered that regional stablecoin markups declined by roughly 0.33 to 0.38 percentage points subsequent to the rollout of fiat-stablecoin pairings on Binance. Furthermore, stablecoins tended to migrate out of Binance into local trading venues when domestic valuations surpassed those on the exchange.
This publication arrives amid rapid expansion of stablecoin adoption inside South Korea. Purchases of these tokens utilizing the Korean won attained $64 billion during the twelve-month duration concluding in June 2025, cementing Korea’s status as the largest regional-currency stablecoin ecosystem across the Asia-Pacific region, according to insights provided by Chainalysis.
The conclusions could additionally hold significance for Korea if future regulations expand corporate and international engagement within digital asset sectors. The writers asserted that heightened foreign exchange liquidity and broader utilization of the won globally could assist the market in absorbing financial tremors as the connections linking stablecoins to traditional fiat markets expand.
The impact extended beyond cryptocurrency ecosystems, as noted by the investigation.
Regarding currencies paired directly on Binance, heightened purchasing intensity for stablecoins correlated with domestic currency depreciation. South Korea, which lacks an official won-stablecoin pairing on Binance, demonstrated no notable foreign exchange rate reaction. Instead, buying activity primarily pushed up the domestic stablecoin markup.
In a separate evaluation utilizing weekly metrics, a one-standard-deviation rise in Google inquiries for bitcoin—deployed as a metric for cryptocurrency investment appetite—corresponded with a 0.118% devaluation of the Brazilian real. It additionally elevated Brazil’s stablecoin premium by 0.109 percentage points.
The review encompassed 12 monetary units possessing adequate cross-market metrics, featuring pairing schedules extending from 2019 through 2025.
Originally published at https://www.coindesk.com/business/2026/09/05/dollar-backed-stablecoins-can-push-local-currencies-lower-bank-of-korea-study-finds.
