Bank of Korea Study Finds Dollar Stablecoins Can Pressure Local

Dollar-backed stablecoins such as USDT and USDC can create downward pressure on local currencies when global cryptocurrency exchanges allow them to be purchased directly with fiat, according to a new study from the Bank of Korea.

The finding, highlighted by Coin Bureau, points to a direct link between stablecoin demand and traditional foreign-exchange markets. When traders purchase dollar-backed tokens using a local currency, market makers may need to sell that currency and acquire U.S. dollars to rebalance their positions, creating an additional channel through which crypto activity can affect exchange rates.

Bank of Korea Links Stablecoin Trading to Foreign Exchange Markets

The Bank of Korea’s Sept. 3 issue note, titled “Stablecoin–FX Linkages: Evidence from Fiat–Stablecoin Pair Listings on a Global Exchange,” examined data from 2019 through 2025 across 12 currencies traded against dollar stablecoins on an overseas exchange.

Researchers found that the introduction of direct fiat-to-stablecoin trading pairs altered markets dynamics. In cases examined by the study, stablecoin premiums narrowed by between 0.33 and 0.38 percentage points after Binance introduced direct trading between dollar stablecoins and currencies including the euro and Turkish lira.

The mechanism matters because stablecoin transactions can involve intermediaries with access to both crypto markets and conventional foreign exchange. That means increased demand for dollar-denominated digital assets does not necessarily remain confined to cryptocurrency markets.

Coin Bureau also cited CoinDesk reporting that a rise in Bitcoin search interest in Brazil was associated with a 0.118% decline in the Brazilian real. That figure concerns Bitcoin search activity rather than stablecoin transactions and therefore should not be treated as direct evidence of the mechanism identified by the Bank of Korea.

Stablecoin Growth Creates a New Policy Consideration

The findings add another dimension to the growing policy debate surrounding dollar-backed stablecoins. As their use expands beyond crypto trading into payments and cross-border transfers, their interaction with national currencies could become increasingly relevant for central banks and foreign-exchange policymakers.

For economies with substantial dollar-stablecoin activity, the key question will be whether these digital-dollar flows remain marginal or become large enough to materially influence currency markets. The Bank of Korea’s research provides an early framework for monitoring that relationship as stablecoin adoption expands.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.