Stablecoin and cross-border crypto market integration

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.