A BIS working paper discovered a 1 basis point increase in U.S. bank deposit rates forecasted slower stablecoin development, cutting ten-week development from
15%to 12%.
Oct 17, 2026, 8:00 a.m. EDT
Oct 17, 2026, 8:00 a.m. EDT
- A BIS working paper discovered a 1 basis point increase in U.S. bank deposit rates forecasted slower stablecoin development, cutting ten-week development from 15 %to 12%.
- The impact was more powerful for Circle’s USDC than Tether’s USDT, which the authors connected to USDC’s closer ties to U.S. users.
- The authors state banks keep some impact over stablecoin adoption through deposit prices, though the sample covers just one high-rate duration.
Banks might have the ability to slow the development of stablecoins like USDT and USDC by paying savers more, according to a working paper released by the Bank for International Settlements (BIS).
Scientist Rashad Ahmed and Iñaki Aldasoro studied weekly information from January 2019 to June 2025, representing bitcoin rates, Treasury yields and more comprehensive monetary conditions. They discovered that a one-week, one basis point increase in typical bank deposit rates anticipated slower stablecoin development.
That little figure, simply 0.01 portion points, cut typical ten-week development in stablecoin market capitalization from about 15% to about 12%, the paper discovered.
Under the authors’ favored quote, which changes for banks raising rates in action to stablecoin development, the result was approximately 3 times bigger, slowing development to about 6%, though the authors flagged some weak point because approach. In both cases, development slowed however did not reverse.
The relationship was more powerful for Circle’s USDC than Tether’s USDT, a pattern the authors stated followed USDC’s closer ties to U.S. users.
The findings include proof to a dispute that has actually drawn cautions from bank executives. Bank of America CEO Brian Moynihan alerted in January that as much as $6 trillion in deposits might move into stablecoins and associated items providing returns, possibly minimizing loaning capability and raising loaning expenses.
The result is partially based upon where companies put their reserves. A December Federal Reserve personnel analysis discussed that cash positioned in stablecoins can go back to banks as company deposits, altering who provides banks’ financing even when overall deposits stay the same.
Larger, uninsured balances might need banks to keep more liquid properties and leave less space for long-lasting loans that banks concern.
Paying more to keep clients likewise raises banks’ financing expenses. The Fed analysis recommended banks might target much better rates at consumers probably to change, while keeping lower rates for less mobile depositors.
The BIS paper does not develop losses of bank deposits or financing. Its sample covers one high-rate episode, and the findings might alter as yield-bearing stablecoins and tokenized cash market funds pick up speed.
Banks “maintain some impact over the rate of that adoption through deposit rates,” the authors composed.
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