Key Takeaways
- A BIS study found that a 0.01 percentage-point increase in bank deposit rates was associated with nearly three percentage points less stablecoin growth over 10 weeks.
- USDC showed a 4.8-percentage-point slowdown, compared with 1.9 points for USDT.
- The findings suggest banks can influence stablecoin demand through interest rates, challenging the idea that digital dollars operate independently of traditional finance.
Stablecoins may be more dependent on traditional banking than investors realize.
A new Bank for International Settlements (BIS) study suggests that higher interest rates on bank deposits can significantly slow the growth of the stablecoin market, with Circle’s USDC showing greater sensitivity than Tether’s USDT.
Published Oct. 13, the research examined US banking and cryptocurrency data from January 2019 through June 2025.
Its findings challenge the assumption that stablecoins and conventional bank accounts operate in separate financial markets.
BIS Finds Small Bank Rate Increases Can Slow Stablecoin Growth
Researchers Rashad Ahmed and Iñaki Aldasoro examined how stablecoin demand responds to banks offering customers higher returns.
Their baseline model found that a one-basis-point increase in deposit rates, equivalent to 0.01 percentage points, was associated with approximately 2.8 percentage points less cumulative stablecoin market capitalization growth over 10 weeks.
For context, average growth during comparable periods was approximately 15%.
A separate statistical approach produced an even larger estimated reduction of roughly nine percentage points.
The findings suggest that investors may reconsider holding non-interest-bearing stablecoins when conventional savings accounts become more attractive.
However, the figures describe slower market growth, not an equivalent decline in stablecoin prices or an automatic loss of market capitalization.
Why USDC Appears More Vulnerable Than USDT
The research identified a notable difference between the two largest dollar-backed stablecoins.
USDC’s estimated 10-week growth response was approximately -4.8 percentage points following a 1-basis-point deposit rate increase, compared with -1.9 percentage points for USDT.
That makes USDC’s estimated sensitivity roughly 2.5 times greater.
The researchers linked the difference to USDC’s closer connections with US depositors and institutional financial activity.
USDT’s broader international usage may help explain its weaker relationship with American bank deposit rates.
However, the study does not establish that USDT is universally safer or that USDC faces greater depegging risk. The USDT estimate was also less statistically conclusive.
Could Banks Challenge Stablecoin Adoption Without Blockchain?
The findings arrive as banks and cryptocurrency companies compete over the future of digital dollar payments.
Traditional banks can attract deposits by increasing interest rates, while major payment stablecoins generally do not directly compensate holders. That creates a potential competitive advantage for banks when borrowing costs remain elevated.
The research also raises questions about how stablecoin growth could affect bank funding and monetary policy.
Still, the authors cautioned that their findings do not prove stablecoins have reduced aggregate bank deposits or lending.
The study is a working paper rather than a definitive regulatory conclusion.
Its central implication is that stablecoins may offer an alternative payment infrastructure without escaping the economic incentives that govern traditional banking.
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Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
