Binance Stablecoin Pairs Linked to Currency Depreciation
The Bank of Korea has published an issue note detailing how direct fiat-to-stablecoin trading pairs on Binance create a channel for demand to flow into foreign-exchange markets, pushing local currencies lower. The study, titled 'Stablecoin, FX Linkages: Evidence from Fiat, Stablecoin Pair Listings on a Global Exchange,' was released by Kim Jihyun and Cho Sangheum, economists on the central bank's International Finance Research Team.
The researchers identified a two-step mechanism where local investors buy stablecoins directly through Binance, while global market makers supply the tokens. These intermediaries then have an incentive to sell the local currency and buy dollars in the FX market, creating a route for stablecoin demand to affect exchange rates.
The analysis covered 12 currencies with sufficient cross-exchange data from 2019 to 2025. After Binance listed a fiat-stablecoin pair, local stablecoin premiums fell by roughly 0.33 percentage points, and higher premiums became associated with significant depreciation of the paired currency.