Demand for dollar stablecoins is having a tangible impact beyond the crypto market. In its latest research publication on September 3, 2026, the Bank of Korea (BOK) concluded that purchases of dollar-pegged tokens put downward pressure on local currencies. Findings by Jihyun Kim and Sangheum Cho came after examining 12 different currencies using local and global trading data across the 2019-2025 period.
The currency depreciation effect becomes evident once investors gain direct access to swap fiat for stablecoins on major exchanges, represented by Binance in this case study. Before direct channels were available, strong domestic buying pressure merely drove up local stablecoin premiums. Local USDT prices became slightly more expensive compared to global benchmarks, but that pressure did not spill over into foreign exchange markets.
A New Channel to Foreign Exchange Markets
The dynamics changed when Binance launched direct fiat-stablecoin trading pairs. The BOK research team noted that local stablecoin premiums shrank by 0.33 to 0.38 percentage points following the rollout of direct access. Price movements across global and local crypto markets became more synchronized, but at the same time, domestic buying pressure started flowing directly into regular foreign exchange markets.
The transmission mechanism relies on maneuvers by global market makers. When retail buyers purchase USDT using local currency, market makers on the selling side automatically receive fiat from that country. To rebalance their portfolios, these entities then sell the local currency on the foreign exchange market. BOK data confirms that stablecoin order flow resulting in net-buying consistently coincides with the depreciation of the respective currency in money markets.
IMF Warnings Validated
The South Korean central bank’s conclusion validates warnings previously raised by the International Monetary Fund (IMF). Well before this, the IMF had cautioned that local token infrastructure makes it easier for individuals to convert their assets into dollar stablecoins without relying on conventional banking rails.
For developing economies like Indonesia, these findings are highly relevant. Indonesian citizens are active users of USDT and USDC, trading both through Binance and local crypto exchanges. While smoother market integration facilitates faster transactions, this channel also opens a permanent loophole capable of exerting downward pressure on the Rupiah in real foreign exchange markets. Dilansir dari crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
