Bank of Korea Study Finds USDC Demand Weakened Brazil's Real by 0.12%

Bank of Korea Issue Note 2026-22

A new study from the Bank of Korea concludes that demand for stablecoins such as USDC and USDT can directly weaken a national currency. The paper, Issue Note 2026-22, was published on September 3 by the central bank's researchers Kim Ji-hyun and Cho Sang-heum and is available in the BOK's official research archive. Its central claim is blunt: dollar-pegged tokens are not harmless payment tools, because purchases made with local fiat feed straight into the foreign exchange market and translate into measurable depreciation pressure on the home currency.

The mechanism is straightforward. When a global exchange such as Binance lets investors buy USDT or USDC directly with local currency, the professional market makers supplying that liquidity accumulate large local-currency balances on the other side of every trade. To stay position-neutral, those desks sell the local currency and buy dollars on the FX market. Aggregated across thousands of retail purchases, the hedging flow becomes real selling pressure on a national currency — even when the buyers themselves never touch the FX market.

The paper's clearest worked example is Brazil. Once Binance opened direct real-to-stablecoin trading, Brazilian investors could convert reais into USDT or USDC without routing through a third currency, and the study measures the real depreciating by roughly 0.12% against the dollar as that demand transmitted into FX markets. Korea presents the mirror image: because Binance operates no direct KRW-to-stablecoin pair, Korean stablecoin demand produced no visible won depreciation — the buying pressure surfaced instead as a local premium on token prices above their $1 peg. For USDC, the second-largest fiat-backed token in circulation, the finding cuts both ways: direct fiat on-ramps are exactly the distribution issuers pursue — recent expansions such as Circle and OKX rolling out USDC across spot, margin and futures trading widen that access — but the BOK's research suggests every such on-ramp is also a fresh channel through which token demand leans on a national currency.

12 Currencies, Seven Years of Data

The BOK authors did not rely on theory. Their dataset tracks Binance's rollout of direct fiat-to-stablecoin pairs across 12 national currencies, with launch dates spanning 2019 to 2025. Measuring local exchange prices before and after each listing, they find the stablecoin premium — the amount by which a token trades above $1 on local venues — compressed by an average of 0.33 to 0.38 percentage points once a direct pair went live. Deeper liquidity and faster arbitrage delivered that pricing efficiency, but the cost shows up elsewhere: in the currency itself. Arbitrage between venues amplifies the FX flow, since arbitrageurs who move tokens from Binance to a richer local exchange widen market makers' rebalancing needs with every cycle.

The researchers also used Google search interest in Bitcoin search interest as a proxy for retail crypto demand: a one-standard-deviation rise in searches was associated with a 0.118% depreciation of the Brazilian real and a 0.109 percentage point increase in the local stablecoin premium. In other words, expectations alone — before any actual purchase — start moving the currency. Korea sits at the center of the policy risk. The won has so far been insulated because no direct KRW pair exists, yet Korea is already the largest local-currency stablecoin market in Asia-Pacific: over the twelve months to June 2025, roughly $64 billion in stablecoins was purchased with won, far ahead of any regional peer. The authors warn that if Seoul relaxes its market rules and admits more corporate and foreign participants, the depreciation channel could activate immediately. Their prescriptions are to deepen FX liquidity and expand international use of the won so the market can absorb the shock — a stance that aligns with the BOK's long-held position that any won-denominated token should be issued under bank-led oversight, with knock-on effects for how PayFi and payment rails scale in the market. Readers tracking the market in real time can follow live spot and futures prices on Gate.

FX Policy Enters the Stablecoin Debate

Our reading at COINOTAG: the Issue Note is the load-bearing document in this story precisely because it is the primary record — a G20 central bank quantifying dollar-token demand as an exchange-rate variable rather than a crypto-native talking point. It reframes issuer growth as macro friction: every new fiat on-ramp for USDC is simultaneously a distribution win and a potential FX pressure point. Expect regulators in smaller currency zones to slow direct listings, and reserve frameworks — like the 100% reserve mandate proposed in Singapore — to gain urgency. The paper also joins earlier Federal Reserve work flagging dollar double-counting if USDC enters M1 or M2: dollar tokens are now formal monetary-policy objects, and investors moving between fiat and tokens through their wallets are, per the BOK's data, moving exchange rates too.