Binance Trading Pairs Linked to Local Currency Depreciation

The Bank of Korea has published an issue note warning that direct fiat-to-stablecoin trading pairs on Binance can push local currencies lower. The note, released by economists Kim Jihyun and Cho Sangheum, finds a two-step mechanism through which stablecoin demand affects exchange rates. When Binance introduces pairs like the Brazilian real against USDT or USDC, local investors buy stablecoins directly while global market makers supply the tokens.

Those intermediaries then have an incentive to sell the local currency and buy dollars in the FX market to balance their positions, creating a route through which stablecoin demand affects exchange rates. The effect is strongest where a global intermediary with access to both markets acts as the direct counterparty.

The analysis covers 12 currencies with sufficient cross-exchange data, spanning 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.