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Higher Bank Deposit Rates Suppress Stablecoin Expansion, BIS Study Finds

1 reports1 sources10/18/2026 updated

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A working paper by BIS economists shows that rising bank deposit rates dampen the growth of stablecoins. The study finds that for every one‑basis‑point increase in deposit rates, the 10‑week growth rate of USDC falls from about 15% to roughly 12% under a baseline estimate, and to around 6% when causal methods are applied. Circle’s USDC is hit hardest. The authors recommend that regulators assess whether stablecoin issuers can offer holders a yield and consider the implications of storing a portion of reserves in banks. This highlights a potential regulatory lever to curb the rapid expansion of stablecoins amid higher bank rates.

Written with AI from the reporting · updated 10/18/2026

Latest developmentOct 18, 21:01
BIS paper finds higher bank deposit rates slow stablecoin market growth
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  1. 1Unclassified fact stationOct 18, 21:35single sourcereport-time onlyrevised

    Banks Hold a Lever Over Stablecoin Adoption, BIS Economists

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    Object：
    working paper
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    not recorded
    Decrypt ↗Report pageRevision 2 · currently revised
    Published (valid side)：
    Oct 18, 21:01
    First seen (known side)：
    Oct 18, 21:35
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Oct 18
  1. DecryptRelated fact: single sourceFact occurrence time unverifiedSource report revised
    BIS paper finds higher bank deposit rates slow stablecoin market growth

    Report first recorded Oct 18, 21:35

    A new Bank for International Settlements working paper analyzing U.S. data from 2019 to 2025 found that higher bank deposit rates predict slower stablecoin market growth. Using weekly data, a one-basis-point increase in deposit rates reduced stablecoin growth from a typical 15% over 10 weeks to roughly 12% under the baseline estimate, and to about 6% under a method isolating cause and effect. The effect was stronger for Circle's USDC than Tether's USDT, which the authors attributed to USDC's closer ties to U.S. users. The authors recommend regulators consider whether stablecoin issuers can pay yield to holders and the trade-offs of requiring reserves held in bank deposits.

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