BIS paper links higher U.S. deposit rates to slower stablecoin growth

A Bank for International Settlements working paper found that higher deposit rates at U.S. banks are linked to slower growth in the market capitalizations of stablecoins like USDT and USDC. Researchers analyzed weekly data from January 2019 to June 2025, considering Bitcoin prices, U.S. Treasury yields, and broader financial conditions. They estimated that a one basis point increase in the average bank deposit rate results in a decrease in the average 10-week stablecoin market cap growth rate from about 15% to around 12%. When accounting for banks adjusting deposit rates in response to stablecoin growth, the growth rate slowed further to approximately 6%, although this method has limitations. In both scenarios, stablecoin market capitalization did not enter contraction. The impact of rates on growth was more significant for Circle's USDC compared to Tether's USDT, indicating USDC's closer ties to U.S. users. The sample included only one high-rate period, and the emergence of yield-bearing stablecoins and tokenized money market funds could alter future results. The paper concluded that banks can influence the pace of stablecoin adoption through their deposit rate policies.

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