BIS working paper finds higher bank deposit rates slow stablecoin growth, with USDC more affected than USDT
A BIS working paper found that a 1 basis point rise in U.S. bank deposit rates cut 10-week stablecoin growth from 15% to 12%, with stronger effects for USDC than USDT.
Why it matters
The research provides empirical evidence that banks retain influence over stablecoin adoption through deposit pricing, suggesting stablecoins and bank deposits function as substitutes for some users. This has implications for how regulators and central banks assess stablecoin competition with traditional banking.
Key facts
A BIS working paper published October 13 studied weekly U.S. data from January 2019 to June 2025 covering 339 weeks
Reported by CoinDesk
Average 10-week stablecoin growth was about 15% in the sample
15 %Reported by CoinDesk
A 1 basis point rise in bank deposit rates cut 10-week stablecoin growth to about 12% under the baseline estimate
12 %Reported by CoinDesk
An instrumental-variable estimate showed a larger effect, slowing 10-week growth to about 6%
6 %Reported by CoinDesk
Similar substitution patterns appeared for certificates of deposit and stablecoins supplied to decentralized lending platforms
Reported by Crypto.News
The authors cautioned the sample covers only one high-rate period and findings do not establish definitive causality
Reported by CoinDesk
What happened
Bank for International Settlements economists Rashad Ahmed and Iñaki Aldasoro published a working paper on October 13 examining weekly U.S. data from January 2019 through June 2025. They found that a one-basis-point increase in average bank deposit rates predicted slower stablecoin market capitalization growth. Under the baseline estimate, 10-week growth fell from about 15% to 12%. An instrumental-variable method designed to isolate causality produced a larger effect, slowing growth to roughly 6%. The substitution effect was stronger for Circle's USDC than for Tether's USDT, which the authors linked to USDC's closer ties to U.S. users. Similar patterns appeared for certificates of deposit and stablecoins supplied to decentralized lending platforms. The authors cautioned that the sample covers only one high-rate period and that their views do not represent official BIS policy.
How the story developed
- Update
BIS working paper published
Working paper 'Are Stablecoins and Bank Deposits Substitutes?' by Rashad Ahmed and Iñaki Aldasoro published on October 13
- First report
First report by CoinDesk
Banks could slow stablecoin growth by paying savers more, BIS paper finds
- Independent corroboration
Independently corroborated by Crypto.News
BIS: Bank rate hikes cut stablecoin growth by 3 points
- Update
Crypto.News and Decrypt publish independent coverage
Both outlets report on the paper with specific figures for USDC vs USDT differential
- Update
Unchained publishes detailed analysis
Unchained reports additional context including the $5B to $220B market cap growth and the 'first empirical evidence' claim
How coverage built up
Independent sources over time, counted the way the consensus panel counts them: a republication of a wire story does not move the line.
- 17 Oct 2026, 12:00 UTC: CoinDesk — 1 independent source, 1 reports
- 17 Oct 2026, 12:14 UTC: Bitcoin Insider — 2 independent sources, 2 reports
- 18 Oct 2026, 12:46 UTC: Crypto.News — 3 independent sources, 4 reports
- 18 Oct 2026, 13:01 UTC: Decrypt — 4 independent sources, 5 reports
- 19 Oct 2026, 09:45 UTC: Unchained — 5 independent sources, 7 reports
Affected entities
Also mentioned: Federal Reserve, Donald Trump, Base, Chainlink
Original sources
| Publisher | Report | Role | Published |
|---|---|---|---|
| CoinDesk Crypto media | Banks could slow stablecoin growth by paying savers more, BIS paper finds | Original | |
| Unchained Crypto media | Stablecoin Growth Cooled as Deposit Rates Rose, With USDC Most Exposed, Working Paper Says | Independent | |
| Decrypt Crypto media | Banks Hold a Lever Over Stablecoin Adoption, BIS Economists Say | Independent | |
| Crypto.News Crypto media | BIS: Bank rate hikes cut stablecoin growth by 3 points | Independent | |
| Bitcoin Insider Aggregator | BIS Paper Says Banks Could Curb Stablecoin Growth by Raising Deposit Rates | Syndicated | |
| Bitcoin Insider Aggregator | Higher Bank Deposit Rates Could Slow Stablecoin Growth, BIS Study Finds | Syndicated | |
| Bitcoin Insider Aggregator | BIS Research Finds Bank Deposit Rate Hikes Slow Stablecoin Growth | Syndicated | |
| Bitcoin Insider Aggregator | BIS Research Finds Stablecoin Growth Highly Sensitive to Small Interest Rate Moves | Aggregated |
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