Stablecoin Demand Depresses National Currencies, Bank of Korea Study Finds

A new study by the Bank of Korea has found that demand for dollar-pegged stablecoins can have a measurable impact on national currencies. The research, which covered 12 currencies between 2019 and 2025, examined the effects of direct fiat-to-stablecoin pairs on exchange rates.

The study found that when investors buy stablecoins directly with their local currency, it creates a demand shock that can lead to depreciation of the national currency. This is because market makers sell the local currency to rebalance their books after buying dollar-linked assets. The researchers noted that this effect is not just about price gaps between local and global stablecoin markets, but also about the direction of trading activity.

The study used data from Binance, a major cryptocurrency exchange, and found that direct fiat-stablecoin pairs led to a narrowing of premiums on stablecoins in many countries. This was particularly evident in Brazil, where investors could buy USDT directly with real on Binance, leading to a depreciation of the Brazilian real.

The researchers also compared South Korea to Brazil, noting that while Korean investors mainly accessed stablecoins through domestic exchanges or indirect channels, there was no statistically measurable relationship between stablecoin buying pressure and the won's exchange rate. However, stronger demand raised the premium for stablecoins inside the Korean market.