Analysis of Exchange Rate Impact from Increased Participation of Corporations and Foreigners in the Cryptocurrency Market

As the participation of corporations and foreigners in the domestic virtual asset market expands, it has been analyzed that the demand for dollar stablecoins may influence the won-dollar exchange rate through foreign exchange transactions. The International Finance Research Team of the Bank of Korea explained in the BOK Issue Note that the support for transactions between fiat currencies and dollar stablecoins on the global digital asset exchange Binance promotes the participation of 'global intermediaries' in the market. The researchers analyzed data from 2019 to 2025 and found that after the ability to trade dollar stablecoins for specific fiat currencies was enabled on Binance, the premium decreased by approximately 0.33 to 0.38 percentage points. Additionally, in countries where fiat currency transactions are supported on Binance, there is a tendency for the exchange rate of that currency against the US dollar to rise when the demand for stablecoin purchases increases. In a comparative analysis between South Korea and Brazil, it was found that in South Korea, the premium for dollar stablecoins increased by about 0.85 percentage points with an increase in Bitcoin search volume, but the exchange rate change was minimal. In contrast, in Brazil, the premium increase was limited to about 0.11 percentage points, while the exchange rate rose by approximately 0.12. The researchers concluded that in the domestic market, where the participation of global intermediaries is limited, the shocks in the digital asset market are primarily reflected in the prices of stablecoins. They added that the impact of future participation by non-financial corporations or foreigners on the exchange rate remains uncertain.

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