A new study by the Bank of Korea finds that USD stablecoins like USDT and USDC can act as a bridge between crypto and forex markets when local currencies are directly tradable. Analyzing 12 fiat-stablecoin pairs on Binance from 2019 to 2025, the report shows that market structure determines whether crypto demand translates into real USD demand or results in local premiums. The findings have implications for countries like South Korea, which lacks a direct KRW-stablecoin pair.
The Bank of Korea put out a research report saying USD stablecoins can act as a bridge between the cryptocurrency market and foreign exchange markets. When local currencies trade directly against USDT or USDC on global exchanges, buying pressure from crypto can spill into the forex market through hedging by global market makers.
The study looked at 12 fiat-stablecoin pairs listed on Binance from 2019 to 2025 and found that market structure decides the transmission path. In markets with direct trading pairs, crypto demand can turn into real USD demand. But in places such as South Korea, where there is no direct KRW-stablecoin pair, the effect shows up mostly as a local premium, without the same transmission to the currency market.
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