US deposit rates choke USDC adoption, and a BIS model reveals why
A BIS study using weekly data from 2019 to June 2025 finds that higher bank deposit rates are linked to slower stablecoin growth, with a larger estimated effect on USDC than USDT. A one-basis-point increase was associated with 4.8% less USDC growth and 1.9% less USDT growth over ten weeks; the aggregate estimate was 2.8%. An instrumental-variable model estimated a larger aggregate effect, but its instrument was weak and relied on limited high-rate-period data. Researchers suggest differing holder profiles may explain the issuer gap, though the data cannot show which holders switched. Exchange rewards also affect the bank-versus-stablecoin comparison and vary by customer and platform. The findings indicate distinct competitive pressures, not a fixed response to Federal Reserve moves or evidence of resulting changes in bank lending.
