⏱ 2 min read
A 1 bp rise cut a 10‑week growth baseline from about 15% to 12% or 6%, the authors found, with a stronger link for USDC than USDT.
Higher bank deposit rates slow stablecoin adoption, according to a Bank for International Settlements working paper that analyzes weekly U.S. data from January 2019 through June 2025. BIS economist Iñaki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics found that when banks raise what they pay on savings, stablecoin market growth decelerates.
Deposit rates curb growth in the authors’ model
Across the sample, stablecoin market capitalization grew by about 15% over a typical 10‑week span, the paper says. After a one‑basis‑point increase in deposit rates, growth slowed to roughly 12% under the authors’ baseline estimate and to about 6% under a second method designed to isolate cause and effect. Put plainly, 12% against 15% is a 3 percentage‑point reduction, or about one‑fifth lower; 6% against 15% is a 9 point reduction, or about three‑fifths lower. Stablecoins still grew, just more slowly.
To separate cause from coincidence, the authors leaned on a quirk in bank behavior: lenders barely raise savings rates until the federal funds rate passes about 3%, then reprice much faster. That discontinuity lets them compare periods with similar macro conditions but different deposit pricing pass‑through.
The link was stronger for Circle’s USDC than for Tether’s USDT, which the paper attributes to USDC’s closer ties to U.S. users. The paper concludes that banks “retain some influence over the pace of that adoption through deposit pricing.”
Yield rules could change the lever
The working paper’s findings come with caveats. The authors note that working papers reflect their views, not necessarily the BIS’s, and the sample spans a single high‑rate cycle in which stablecoins paid holders no interest. They add that regulators should weigh whether stablecoin issuers may pay yield, and the trade‑offs of requiring issuers to keep part of their reserves in bank deposits.
That question is live in Washington, the report says. It reports that banks have lobbied to keep stablecoin yield off the table and that the fight loomed over the Clarity Act’s failed Senate vote. Meanwhile, the report says the OCC, FDIC, and Treasury are writing rules to implement the GENIUS Act, which takes effect in January. According to the report, the law legalizes stablecoins in the United States and sets rules for issuance, use, and custody.
The next thing that would change this reading is whether final U.S. rules permit issuers to pay yield to holders, which would weaken banks’ deposit‑rate lever.
Source: Decrypt.
This article was written with AI assistance and reviewed by an editor.
This content is for informational purposes only and does not constitute financial advice.
🧠 HafidWatch Take
The notable 6 percentage point gap between the study’s two growth estimates highlights significant uncertainty in measuring how deposit rates influence stablecoin adoption. This variance suggests policymakers should approach conclusions about banks’ leverage over stablecoin growth cautiously, as the underlying causal relationships remain difficult to establish definitively. Any regulatory decisions should account for this ambiguity to avoid overestimating the impact of deposit pricing on stablecoin dynamics.
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