Dollar Stablecoins Could Put Pressure on Local Currencies, Korea Finds
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Dollar-backed stablecoins could pressure local currencies when exchanges allow direct fiat purchases, a Bank of Korea study found. Researchers examined 12 currencies on Binance, including Brazil’s real, and tracked trading involving USDT and USDC.
Stablecoin Demand Hits Currency Markets
The findings linked dollar-stablecoin demand with foreign-exchange markets. When demand rises, market makers can sell local currencies to buy dollars. Consequently, that activity can add pressure to exchange rates.
Related: Singapore’s New Stablecoin Framework: What Issuers Need to Know
Direct fiat-stablecoin listings also cut local stablecoin premiums by about 0.33 to 0.38 percentage points. Additionally, stablecoins moved toward local exchanges when prices exceeded Binance levels.
South Korea showed a different pattern because Binance lacks a direct won-stablecoin pair. Henc…
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