The Bank of Korea has published an issue note showing that direct fiat-to-stablecoin trading pairs on Binance create a channel that carries demand for dollar-pegged stablecoins into foreign-exchange markets, pushing some local currencies lower. The note, “Stablecoin–FX Linkages: Evidence from Fiat–Stablecoin Pair Listings on a Global Exchange,” was released on 3 September 2026 by Kim Jihyun and Cho Sangheum, economists on the central bank’s International Finance Research Team.
How Stablecoin Demand Reaches the FX Market
The authors trace a two-step mechanism. When Binance introduced pairs such as the Brazilian real against USDT or USDC, local investors could buy stablecoins directly while global market makers supplied 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.
What the Data Show
The analysis covers 12 currencies with sufficient cross-exchange data, with pair introductions 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. Net buyer-initiated order flow, which captures demand pressure in the stablecoin market, was also significantly associated with local currency depreciation. Across the 30 currencies the authors track, the median USD stablecoin premium is about 0.8 percent, and Binance holds roughly 69 percent of USDT and USDC balances deposited across exchanges, underscoring its role in the market structure they study.
The Korean Exception and Policy Implications
Korea shows the opposite pattern. Because no direct Binance won-stablecoin pair is available, a crypto-demand shock raises the local stablecoin premium by about 0.85 percentage points with no statistically significant effect on the won-dollar exchange rate, while in Brazil the same shock raises the premium by only about 0.11 points but depreciates the real by about 0.12 percent. The authors argue that as Korean digital-asset markets open to corporate and foreign participation, stablecoin policy tension between the central bank and lawmakers should be weighed alongside Asia’s broader stablecoin push, with efforts to internationalize the won and deepen FX liquidity so the market can absorb shocks.
