BIS paper links higher bank rates to slower stablecoin growth

A Bank for International Settlements working paper finds that higher U.S. bank deposit rates are associated with slower growth in stablecoin market capitalization, with the strongest baseline effect estimated for USD Coin, or USDC. The authors’ figures indicate slower expansion, not a decline in the overall stablecoin market. In the paper’s baseline model, a one-basis-point increase in deposit rates was associated with 2.8 percentage points less cumulative stablecoin growth over the following 10 weeks. Average growth over that period was about 15% in the study’s sample, so applying the estimate would bring it to roughly 12%. The estimated response varied by stablecoin. For each one-basis-point increase, the model associated USDC with 4.8 percentage points less growth over 10 weeks, compared with 1.9 percentage points for Tether’s USDT. The authors said USDC’s greater sensitivity was consistent with its closer links to U.S. users and financial markets. Economists Rashad Ahmed and Iñaki Aldasoro analyzed weekly U.S. data from January 2019 through June 2025 in a working paper published October 13. Their analysis examines whether bank deposits and stablecoins act as partial...