BIS Working Paper: Higher Bank Deposit Rates May Slow Stablecoin Growth, With USDC Showing More Pronounced Reaction
The Bank for International Settlements (BIS) published a working paper titled *Are Stablecoins and Bank Deposits Substitutes?*. Drawing on weekly U.S. data from January 2019 to June 2025, and controlling for factors including Bitcoin prices, Treasury yields, and broader financial market conditions, the study finds that rising bank deposit rates are associated with a slowdown in the growth of stablecoin market capitalization. Per baseline model estimates, a 1 basis point (0.01 percentage point) weekly increase in the average deposit rate corresponds to a cumulative stablecoin market capitalization growth rate that is approximately 3 percentage points lower over the subsequent 10 weeks, falling to around 12% from the roughly 15% average level, rather than resulting in an outright decline in market capitalization. USDC exhibits a stronger reaction than USDT. The authors note that the findings do not confirm a reduction in total bank deposits or lending volumes, and the sample only covers a single high-interest-rate cycle. The views expressed in the paper are those of the authors and do not necessarily represent the official position of the BIS or its member central banks.
Source: PANewsRead original
- #Stablecoin