BIS Paper: Higher Bank Deposit Rates Could Slow Stablecoin Growth
A Bank for International Settlements working paper finds that stablecoin growth eases when U.S. banks lift deposit rates, with Circle's USDC the most sensitive.
AfroEuropa Newsroom
AfroEuropa desk
Banks may be able to temper the expansion of stablecoins such as Tether's USDT and Circle's USDC by paying savers more, according to a working paper from the Bank for International Settlements (BIS).
The paper, authored by researchers Rashad Ahmed and Iñaki Aldasoro, examined U.S. data from January 2019 to June 2025. They found that a one-basis-point rise in bank deposit rates was linked to a drop in average stablecoin market capitalisation growth over a 10-week window, from roughly 15% to 12%.
According to the findings, stablecoins and bank deposits appear to compete for some of the same money. Because most stablecoins pay little or no interest, higher returns on conventional savings accounts could prompt users to shift funds back into banks.
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