Stable coins are Moving FX Markets. The BIS just proved it.

Every Friday at 5pm New York time, the world's largest market goes dark. Over the weekend traditional foreign exchange markets are effectively closed, meaning no fresh prices, liquidity or visibility.

But pressures on currencies don't stop just because a market closes. Political crises can break over weekends and often do. Central banks can make surprise announcements on holidays. In fact, Bank Holidays were introduced so that the authorities can make big changes when markets are closed. Capital doesn’t stay still just because it’s the weekend or because the futures market has closed. When traditional markets reopen the gap between close and the new reality can be significant, especially in emerging markets.

This is the problem we set out to solve with NCFX “FX from Crypto” feed that provides prices in 22 currencies against the USD every 250 milliseconds, 24 hours a day, 7 days a week, derived from real-time trading activity across stable coins and major crypto assets like BTC and ETH. Like the pressures that determine market pricing, it doesn't pause for weekends, public holidays, or closed official sessions.

The institutional case has arrived

A major new paper published by the central bankers bank, the Bank of International Settlements (BIS), draws on data from 64 crypto exchanges across 27 fiat currencies, now provides rigorous evidence for something we've long observed in our data: crypto-based FX markets are causally linked to traditional currency markets. They don't merely echo traditional FX; they generate independent, price-relevant information.

Read the BIS Paper here: https://www.bis.org/publ/work1340.pdf

The researchers found that a 1% shock to stable coin inflows measurably depreciates the local currency, widens dollar funding premiums, and creates persistent price gaps between the crypto and traditional FX venues. These effects are strongest in emerging markets, precisely the currencies where weekend and overnight gaps tend to be largest and most consequential. Given these effects its difficult to imagine how an institutional player in the foreign exchange market could justify not having access to 24X7 rates.

Why 24/7 visibility changes the game

Consider what happens during the roughly 70 hours each week when spot FX markets are closed or running on minimal liquidity. Crypto markets remain fully active. Stable coins continue to trade against local currencies on exchanges worldwide. Capital continues to flow.

The NCFX feed captures this activity in real time. That means you can see a currency coming under pressure on a Saturday afternoon and act or be ready to do so when traditional markets reopen. For traders, that's edge for risk-managers to not have the information is hard to excuse. For anyone running models that assume static weekend pricing, it's evidence of a significantly flawed assumption.

The gap matters most when it matters most. Stress events don't follow a trading calendar. The Terra/Luna collapse in May 2022 unfolded across a weekend, and the crypto-FX channel transmitted that shock into real currency markets before traditional venues reopened. The paper documents exactly this kind of amplification, adverse shocks deplete intermediary capital, reducing their capacity to absorb further hits, and spillovers escalate sharply. Lehman was allowed to fail on a Sunday afternoon and current Iran conflict with the US and Israel began on a Saturday. 

A new layer of FX infrastructure

None of this means crypto-derived FX pricing replaces traditional data. It complements it — filling the gaps in time, geography, and market access that the traditional infrastructure leaves open. As the stable coin market continues to grow (net inflows from non-USD currencies now represent over 70% of total stable coin activity), the signal embedded in this data only gets stronger.

We built our feed because we believe continuous FX visibility is a necessity. We believe the BIS Paper takes the same view. If you're trading FX, managing cross-border risk, or building models that need to reflect what currencies are actually doing, not just what they were doing at Friday's close get in contact with us at info@newchangefx.com or visit our website at www.newchangefx.com.