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Stablecoin and cross-border crypto market integration

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  • Kang, Chang-Mo
  • Kang, Hyoung-Goo
  • Kim, Donghyun
  • Sul, Hong Kee

Abstract

We examine the role of stablecoins in the cross-border integration of cryptocurrency markets. Using high-frequency data on the kimchi premiums of Bitcoin and Tether (USDT), we document a cointegrating relationship statistically indistinguishable from theoretical parity between the two premiums. Deviations from parity mean-revert with a half-life of approximately 24 min through complementary adjustments, 12.61 % per interval for Tether and 12.83 % for Bitcoin. Taken together, the evidence is consistent with stablecoins functioning as an effective cross-market numeraire, supporting price alignment across currency-segmented venues even when local premia persist.

Suggested Citation

  • Kang, Chang-Mo & Kang, Hyoung-Goo & Kim, Donghyun & Sul, Hong Kee, 2025. "Stablecoin and cross-border crypto market integration," Economics Letters, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:ecolet:v:257:y:2025:i:c:s0165176525005415
    DOI: 10.1016/j.econlet.2025.112704
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    References listed on IDEAS

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