The cost of getting dollars with stablecoins now affects real currency markets

It turns out that buying US dollars using stablecoins can make local currencies weaker and raise the cost of getting dollars in traditional markets. This means that problems in the stablecoin market can spill over into the global financial system.

For years, stablecoins were seen as a separate, niche part of the financial world. This paper shows that they are now big enough to affect how much real dollars cost and how stable other currencies are. If you thought stablecoins were just for crypto traders, you were wrong. They are now a measurable part of the global financial plumbing.