BIS Finds Higher Bank Rates Slow Stablecoin Growth

A BIS study found that a one-basis-point increase in deposit rates corresponds to roughly three percentage points less stablecoin market cap growth over 10 weeks. USDC showed a stronger response to rising deposit rates, with growth falling 4.8 percentage points per basis point versus 1.9 points for USDT. Stablecoin demand weakens as bank deposit yields become more competitive, particularly when the U.S. federal funds rate exceeds approximately 3%. A Bank for International Settlements (BIS) working paper finds that higher bank deposit rates can slow stablecoin growth, as savers shift money toward interest-bearing accounts.