Bank of Korea Study Links Dollar‑Backed Stablecoins to Local Currency Depreciation

A recent study by the Bank of Korea indicates that dollar‑backed stablecoins can exert downward pressure on local currencies. The research highlights a correlation between heightened buying activity in stablecoins traded on Binance and the depreciation of the corresponding fiat currencies.

Key Findings

• Increased demand for stablecoins paired with Binance leads to measurable declines in the value of the related local currencies.
• Market makers appear to balance their positions by selling the fiat currency, contributing to the depreciation.

Implications for Markets

The findings suggest that stablecoin activity on major exchanges can influence traditional currency markets, especially in regions where these digital assets are widely used for trading and remittances.