Higher interest rates on bank deposits could slow the growth of stablecoins, according to new research from the Bank for International Settlements (BIS). A one-basis-point increase in deposit rates could reduce average stablecoin market capitalization growth from 15% to 12% over ten weeks.
USDC Shows Greater Sensitivity to Bank Rates
Researchers Rashad Ahmed and Iñaki Aldasoro based their findings on weekly data collected between January 2019 and June 2025. An alternative estimate put stablecoin growth at 6%, though the researchers said that method had limitations.
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The study also found that Circle’s USDC responded more strongly to changes in bank deposit rates than Tether’s USDT. Separately, Bank of America CEO Brian Moynihan has warned that stablecoins could pull as much as $6 trillion from bank deposits.
Stablecoin Growth Could Raise Bank Costs
The shift may not mean banks lose deposits overall. A Federal Reserve analysis found that stablecoin issuers can hold reserves in bank deposits, keeping some funds within the banking system.
Banks could still face pressure if customers move money from regular accounts into stablecoins. They may have to offer higher interest rates to retain depositors, increasing their funding costs. Changes in deposit patterns could also affect how much liquidity banks need to keep available.
The BIS stressed that its findings do not prove stablecoins reduce bank deposits or lending. The analysis covers one period of rising interest rates, and yield-bearing stablecoins and tokenized money market funds could change the competition.
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