How Dollar Stablecoins Are Reshaping National Currency Markets

Researchers Jihyun Kim and Sangheum Cho analyzed 12 currencies between 2019 and 2025, focusing on the impact of Binance introducing direct fiat-to-stablecoin pairs. The findings suggest that when global market makers facilitate these trades, they often rebalance their positions by selling the acquired local currency for dollars in traditional foreign exchange markets. This process effectively bridges the gap between digital asset demand and conventional FX volatility.

Before the introduction of direct pairs, buying pressure typically remained contained within local markets, manifesting as a premium on stablecoin prices. Once Binance enabled direct trading, these premiums narrowed by 0.33 to 0.38 percentage points as liquidity improved. However, this integration forced domestic markets to absorb the broader economic consequences of digital dollar demand. South Korea serves as a critical control group in this study: because the won lacks direct stablecoin pairing on major global exchanges, the country continues to see higher local premiums without a corresponding, measurable impact on the won’s exchange rate.

This research highlights a fundamental shift in how non-traditional capital flows affect national economies. While the study does not claim that stablecoins always cause depreciation, it underscores that market structure dictates the risk. As regulators in Seoul and elsewhere weigh the future of digital-asset frameworks, the Bank of Korea warns that any policy move toward broader corporate or foreign participation could inadvertently expose the won to the same transmission mechanisms identified in other global markets.