BIS Study: Higher Bank Deposit Rates May Slow Stablecoin Growth, USDC Reacts More Strongly

Huoxing Finance reports that the Bank for International Settlements (BIS) has published a working paper titled “Are Stablecoins Substitutes for Bank Deposits?” Based on U.S. weekly data from January 2019 to June 2025, and controlling for factors such as Bitcoin prices, government bond yields, and financial market conditions, the study finds that higher bank deposit rates are associated with a slowdown in the growth rate of stablecoin market capitalization. According to the baseline model, a one-basis-point (0.01 percentage point) weekly increase in average deposit rates corresponds to a cumulative decrease of approximately 3 percentage points in the stablecoin market capitalization growth rate over the following ten weeks, from around 15% to about 12%, rather than an outright decline in market value. USDC exhibits a stronger response than USDT. The authors note that the study does not imply a reduction in total bank deposits or lending, and the sample covers only one cycle of high interest rates. The views expressed in the paper are those of the authors and do not necessarily reflect the position of the BIS or its member central banks.