Demand for dollar-backed stablecoins can push national currencies lower once global exchanges allow investors to buy the tokens directly with fiat currency, a Bank of Korea study found.
The study by researchers Jihyun Kim and Sangheum Cho examined what happened when Binance introduced direct trading between currencies, such as the Brazilian real and dollar-pegged stablecoins like USDT and USDC.
The listings let investors buy stablecoins with local currency while professional market makers supplied the tokens. Those market makers then have an incentive to sell the local currency and buy dollars in the FX market to balance their positions.
That led to a route through which demand for stablecoins effectively affected exchange rates.
The researchers found local stablecoin premiums fell by about 0.33 to 0.38 percentage points after Binance introduced fiat-stablecoin pairs. Stablecoins also tended to flow from Binance to local exchanges when local prices rose above Binance’s.
The study comes as Stablecoin use has already grown quickly in Korea. Won purchases of the tokens reached $64 billion in the 12 months through June 2025, making Korea by far the largest local-currency stablecoin market in Asia-Pacific, according to Chainalysis data.
The findings could also matter for Korea if rules later allow more corporate and foreign participation in crypto markets. The authors said deeper FX liquidity and wider use of the won abroad could help the market absorb shocks as links between stablecoins and traditional currency markets grow.
The effect extended beyond crypto markets, the study found.
For Binance-paired currencies, stronger stablecoin buying pressure was linked to local currency depreciation. Korea, which lacks a direct Binance won-stablecoin pair, showed no significant exchange-rate response. Instead, buying pressure mainly raised the local stablecoin premium.
In a separate test, using weekly data, a one-standard-deviation increase in Google searches for bitcoin, used as a proxy for crypto investment demand, was associated with a 0.118% depreciation of the Brazilian real. It also raised Brazil’s stablecoin premium by 0.109 percentage points.
The analysis covered 12 currencies with sufficient cross-exchange data, with pairing dates spanning 2019 to 2025.
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