BoK finds market infrastructure rules affect stablecoin and FX moves
Access to FX and crypto markets bears on won internationalisation efforts
A Bank of Korea study has found that the market infrastructure on which US dollar stablecoins are traded can result in the depreciation of local currencies, with implications for the central bank’s own won internationalisation goals.
Jihyun Kim and Sangheum Cho on September 3 published their analysis of 30 currencies since 2022. They find that US dollar stablecoin premia are associated with “significant local currency depreciation” when there is a demand shock for dollars.
They also find
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