A working paper published by the Bank for International Settlements (BIS) finds that banks could slow the growth of stablecoins such as USDT and USDC by paying savers more. Researchers Rashad Ahmed and Iñaki Aldasoro studied weekly data from January 2019 to June 2025. The researchers accounted for bitcoin prices, Treasury yields and broader financial conditions.
The paper found that a one-week, one basis point rise in average bank deposit rates predicted slower stablecoin growth. That increase, equivalent to 0.01 percentage points, reduced average ten-week growth in stablecoin market capitalization from about 15% to about 12%. The authors' preferred estimate adjusts for banks raising rates in response to stablecoin growth. Under that estimate, the effect was roughly three times larger, slowing growth to about 6%, although the authors flagged some weakness in the method. Stablecoin growth slowed but did not reverse under either estimate.
The paper found a stronger relationship for Circle's USDC than for Tether's USDT. The authors said that pattern was consistent with USDC's closer ties to U.S. users. The authors concluded that banks retain some influence over the pace of stablecoin adoption through deposit pricing.
Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns. Moynihan warned that such transfers could reduce lending capacity and raise borrowing costs.
The effect on banks depends partly on where stablecoin issuers place reserves. A December Federal Reserve staff analysis explained that money placed in stablecoins can return to banks as issuer deposits. Such flows can change who supplies bank funding even when total deposits remain unchanged. Larger, uninsured balances could require banks to hold more liquid assets, leaving less room for long-term loans.
Higher deposit rates also raise banks' funding costs. The Federal Reserve staff analysis suggested that banks could offer better rates to customers most likely to switch while retaining lower rates for less mobile depositors.
The BIS paper does not establish losses of bank deposits or lending. The sample covers only one high-rate episode. The findings may change as yield-bearing stablecoins and tokenized money market funds become more widely used.