A slight increase in interest rates on bank deposits could slow the growth of stablecoins. This is the finding of a study by the Bank for International Settlements (BIS), which highlights competition between bank savings and these cryptocurrencies indexed to traditional currencies. However, the effect varies depending on the players: Circle’s USDC seems more sensitive to this competition than Tether’s USDT.
In brief
- A one basis point increase in deposit rates reduces stablecoin growth over ten weeks, from 15% to 12% in the main estimate, and up to 6% in an alternative estimate.
- USDC reacts more than USDT, in part because of its closer ties to US users.
- The study does not prove either a flight of bank deposits or a decline in credit. It also highlights the limits of an analysis carried out during a period of high rates.
Higher savings rates to slow down stablecoins
The question of links between banks and stablecoins continues to fuel debate. At the end of August, Tether was already contesting the reading of the BIS on tokenized deposits. This time, the institution is moving on to data analysis with a study by Rashad Ahmed and Iñaki Aldasoro.
The researchers studied weekly US data from January 2019 to June 2025. They notably took into account key rates, bond yields, the dollar and stock market volatility.
Their observation is telling: an increase of one basis point, or 0.01 percentage point, reduces the growth of stablecoins over ten weeks from around 15% to 12%. Another estimate, which corrects the reactions of banks in setting their rates, brings this growth to around 6%.
For what ? The rates offered by banks do not mechanically follow those of the central bank. They change little when rates remain low, then adjust more strongly beyond a certain threshold.
Researchers use this difference to measure the effect of rates on stablecoins. Their results hold up to several tests, including excluding the Silicon Valley Bank episode.
USDC and USDT, different sensitivity to bank rates
The study also notes a difference between the two main stablecoins. Circle’s USDC reacts more to changes in deposit rates than Tether’s USDT. Researchers attribute this gap in particular to Circle’s proximity to American users.
The results also do not seem to reflect a simple general trend in the crypto market. A complementary test does not show the same link between the instrument used by the researchers and the growth of other cryptocurrencies.
Furthermore, a Federal Reserve note explains that funds placed in stablecoins can return to the banking system in the form of deposits held by the issuers. The deposits therefore do not necessarily disappear, but their distribution changes. Banks may, however, need to maintain more liquid assets if they rely on more volatile funding.
The limits of the study and the questions still open
Be careful, however, not to draw excessive conclusions. The study demonstrates neither an effective decline in deposits nor a contraction in credit. Additionally, it covers a single episode of high rates. Interest-bearing stablecoins and tokenized monetary funds could also modify this competition by directly offering a return to their holders.
On the regulatory front, the Federal Reserve proposed a two-day deadline at the end of September to reimburse stablecoin holders. In January, the head of Bank of America also spoke of the risk of seeing several trillion dollars leave bank deposits.
Basically, banks have a simple lever to remain competitive: better remunerate savings. Competition with stablecoins is therefore not only based on technology, but also on the return offered to liquidity holders.
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