Dollar-backed stablecoins could pressure local currencies when exchanges allow direct fiat purchases, a Bank of Korea study found. Researchers examined 12 currencies on Binance, including Brazils real, and tracked trading involving USDT and USDC.
Stablecoin Demand Hits Currency Markets
The findings linked dollar-stablecoin demand with foreign-exchange markets. When demand rises, market makers can sell local currencies to buy dollars. Consequently, that activity can add pressure to exchange rates.
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Direct fiat-stablecoin listings also cut local stablecoin premiums by about 0.33 to 0.38 percentage points. Additionally, stablecoins moved toward local exchanges when prices exceeded Binance levels.
South Korea showed a different pattern because Binance lacks a direct won-stablecoin pair. Hence, the study found weaker evidence of direct pressure on the won.
Korea Faces Growing Stablecoin Demand
The Bank of Korea said these links could deepen as corporate and foreign participation grows. Moreover, it said policymakers should consider greater international use of the won and deeper FX liquidity.
Meanwhile, 21 financial institutions plan to launch a dollar-pegged stablecoin in early 2027. The group also plans tokens linked to other G7 currencies, with the euro as a priority.
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