From Decrypt · By Decrypt Agent
In brief
A new BIS working paper using U.S. data from 2019 to 2025 found that higher bank deposit rates predict slower stablecoin market growth.
The effect was stronger for Circle’s USDC than for Tether’s USDT, which the authors tied to USDC’s closer links to U.S. users.
The authors said regulators should weigh whether issuers can pay yield. The paper reflects their views, not necessarily the BIS’s.
Banks worried about losing customers to stablecoins may already have a counterweight: the interest rate on a savings account.
That’s the takeaway from a new working paper published by the Bank for International Settlements, the Basel-based bank for central banks. Using 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 stablecoin growth slows when banks raise deposit rates.
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Stablecoin market capitalization grew by about 15% over a typical 10-week span in the sample used by the researchers. A one-basis-point bump in deposit rates, a sizable weekly move for slow-moving savings rates, cut that to roughly 12% under the authors’ baseline estimate. Under a second method designed to isolate cause and effect, it fell to about 6%. Stablecoins kept growing, just more slowly.
To separate cause from coincidence, the authors relied on a quirk in bank behavior. Lenders barely raise savings rates until the federal funds rate passes about 3%, and then they reprice much faster.
The link was stronger for Circle’s USDC than for Tether’s USDT, which the authors attribute 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.”
BitcoinBTC · USD$81,459−1.96%Oct 11Oct 13Oct 15Oct 16Oct 18$84.2k$82.9k$81.5k$80.2k24h HighHigh$82,17824h LowLow$80,823VolVol$662.9MMarket projectionsOdds by MyriadToday$80,000 to $82,000$80k–$82k89% chance→Buy Bitcoin with USDTPowered by JupiterPrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →The findings come with caveats. Working papers reflect the authors’ views, not necessarily the BIS’s, and the sample spans a single high-rate cycle in which stablecoins paid holders no interest.
The authors said regulators should weigh whether stablecoin issuers may pay holders yield, along with the trade-offs of requiring issuers to keep part of their reserves in bank deposits.
That debate is live in Washington. Banks have lobbied to keep stablecoin yield off the table, a fight that loomed over the Clarity Act’s failed Senate vote. Meanwhile, the OCC, FDIC, and Treasury are writing rules to implement the GENIUS Act, which takes effect in January. The GENIUS Act, signed into law by President Donald Trump in July of last year, essentially legalized stablecoins in the United States and set rules of the road for their issuance, use, and custody.