Track 12 currencies over six years. Watch what happens when a global exchange flips on a fiat-to-dollar-stablecoin pair. A Bank of Korea study did exactly that, and the answer is blunt: the dollar-backed stablecoin trade can press local currencies toward the dollar. Premiums shrink. The leftover demand bleeds into the exchange rate.
Bank of Korea Issue Note No. 2026-22, published 3 September, puts a number on it. Binance’s introduction of a local-currency dollar stablecoin pair cut the local premium on dollar stablecoins by 0.33 to 0.38 percentage points, a statistically significant drop. The authors, Kim Ji-hyun and Cho Sang-heum, manage the International Finance Research Team inside the bank’s International Department. The original Bank of Korea publication states that the views expressed are the authors’ own and do not represent the Bank of Korea’s official position.
The paper’s Korean-language title translates as “The Linkage Between Dollar Stablecoins and the Foreign Exchange Market: Focusing on the Role of Global Exchanges.” Coverage runs 2019 through 2025 across 12 currencies, among them the euro, Turkish lira and South African rand. The dollar stablecoins examined are Tether (USDT) and Circle’s USD Coin (USDC).
The mechanism runs through market makers. Once Binance opens a fiat-to-dollar stablecoin pair, global intermediaries can arbitrage the gap between local exchange rates and the stablecoin price. Rebalancing follows. Local premiums get pulled toward zero. After the listing, the study finds, the residual premium is what correlates with local-currency depreciation against the dollar. Before the listing, that relationship was not statistically meaningful.
In practice, the dollar demand that used to sit inside a price gap on a local exchange starts to show up in the actual exchange rate instead.
Method-wise, the study leans on two natural experiments. The first is the Binance listing itself, treated as the moment global participation in a local fiat market becomes possible. The second is a one-standard-deviation rise in Google searches for Bitcoin, a proxy for shifts in crypto demand. Run that proxy through Korea and the dollar-stablecoin premium climbed roughly 0.85 percentage points. The won-dollar rate did not move in a statistically meaningful way.
Korea, the authors note, has no Binance KRW-USDT or KRW-USDC pair. Corporate and foreign participation in the domestic virtual-asset market is restricted. That, they argue, is why the FX passthrough shows up elsewhere in their data but not in the won. The point lands quietly, framed as a forward-looking risk rather than a current Korean problem.
Brazil offers the counterpoint. With a Brazilian real (BRL) pair live on Binance, the same one-standard-deviation Bitcoin-search shock was associated with the real weakening about 0.12 percent against the dollar. That is the kind of move the authors treat as evidence the channel works once the infrastructure is open.
Premium levels themselves differ widely. Korea’s median won-denominated USDT premium since 2022 sits at 1.67 percent. The 30-currency median is near 0.8 percent. Ukraine’s hryvnia ran 1.86 percent over the same window. South Africa’s rand, 1.80 percent.
In practice, that means the size of the gap is not what the BoK is warning about. It is what happens once the gap closes through a global exchange and the demand has to find another outlet.
The policy recommendation is deliberately bundled. The analysis published by Stablecoin Insider frames the BoK position as a call to pair digital-asset rulemaking with won internationalization and a deeper FX market rather than to restrict stablecoins alone; it specifies no cap and no tax.
That “package” framing matters. It separates this note from the harder line often associated with stablecoin-skeptic regulators. The authors are not arguing that dollar stablecoins should be kept out. They are arguing that the FX consequences of admitting them should be legislated alongside the payment and custody rules.
The finding arrives amid active Korean rulemaking. Shinhan, one of the country’s largest banks, signed an agreement with Visa on 26 August to build stablecoin payment rails, before the relevant stablecoin framework is finalized. Yonhap and Aju Press carried the same figures the day the note was released.
The study does not claim that stablecoins are the main driver of any currency’s level. What it claims is narrower and more defensible: that the trading infrastructure around them can become a transmission channel for dollar demand into local FX.
That part is new.
