Banks Hold a Lever Over Stablecoin Adoption, BIS Economists Say
Summary
A BIS working paper finds that higher U.S. bank deposit rates are associated with slower stablecoin growth. Using weekly data from 2019 to mid-2025, researchers estimate a typical 10-week stablecoin market-cap increase of about 15% fell to roughly 12% after a one-basis-point deposit-rate rise, and to about 6% in a method intended to isolate causation. The effect was stronger for USDC than USDT. The authors caution that the study covers one high-rate cycle and stablecoins that paid no yield. They say regulators should consider the effects of allowing issuers to offer yield and requiring reserves to be held partly as bank deposits, amid U.S. rulemaking under the GENIUS Act.
