A recent study by the Bank of Korea indicates that when global exchanges permit investors to directly purchase dollar-backed stablecoins using fiat currency, this demand could put downward pressure on the domestic currency's exchange rate. Researchers analyzed the introduction of direct trading pairs on Binance that allow Brazilian Real to be exchanged for dollar stablecoins such as USDT and USDC.
The findings reveal that such listings enable investors to buy stablecoins with their local currency. To provide liquidity, professional market makers must sell the domestic currency and purchase dollars in the foreign exchange market to balance their positions, thereby creating a transmission channel through which stablecoin demand influences exchange rates. Data shows that after Binance introduced these fiat-stablecoin trading pairs, the local stablecoin premium dropped by approximately 0.33 to 0.38 percentage points. When stablecoin prices on local exchanges exceed those on Binance, stablecoins tend to flow from Binance to the domestic exchanges.
South Korea's own stablecoin usage has grown rapidly. Data from Chainalysis indicates that in the 12 months leading up to June 2025, purchases of stablecoins with Korean Won reached $64 billion, making South Korea the largest local-currency stablecoin market in the Asia-Pacific region. The study notes that if future regulations permit more corporations and foreign investors to enter the crypto market, deeper foreign exchange liquidity and broader usage of the Korean Won overseas could help the market absorb shocks.
However, for South Korea, which lacks a direct Won-stablecoin trading pair on Binance, no significant exchange rate response was observed; instead, buying pressure mainly drove up the local stablecoin premium. In a separate test using weekly data, where Bitcoin Google search volume served as a proxy for crypto investment demand, a one-standard-deviation increase in search volume was associated with a depreciation of the Brazilian Real by approximately 0.118%, alongside a rise in the Brazilian stablecoin premium of 0.109 percentage points. That analysis covered 12 currencies with sufficient cross-exchange data, spanning a period from 2019 to 2025.
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