【Breaking】BIS study: Rising deposit rates will weigh on stablecoin growth, with USDC more affected than USDT
Deep Tide TechFlow reports that on October 17, according to BIS Working Paper No. 1382, BIS economist Iñaki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics published a study examining whether stablecoins and bank deposits are substitutes for one another. Using weekly U.S. data from January 2019 to June 2025, the study applies the local projections method to estimate how stablecoin market capitalization responds to changes in deposit rates. The results show that rising deposit rates predict slower stablecoin growth. Against a backdrop of average stablecoin growth of 15% over ten weeks, OLS estimates indicate that each 1-basis-point increase in deposit rates would reduce the growth rate by about 3 percentage points, to roughly 12%. The study uses the nonlinear tendency for banks to price deposits more aggressively once the federal funds rate exceeds about 3% as an instrumental variable; this produces an estimate roughly three times as large, with growth falling to about 6%. A placebo test on non-stablecoin crypto assets found no similar effect.
Deep Tide TechFlow reports that on October 17, according to BIS Working Paper No. 1382, BIS economist Iñaki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics published a study examining whether stablecoins and bank deposits are substitutes for one another. Using weekly U.S. data from January 2019 to June 2025, the study applies the local projections method to estimate how stablecoin market capitalization responds to changes in deposit rates. The results show that rising deposit rates predict slower stablecoin growth. Against a backdrop of average stablecoin growth of 15% over ten weeks, OLS estimates indicate that each 1-basis-point increase in deposit rates would reduce the growth rate by about 3 percentage points, to roughly 12%. The study uses the nonlinear tendency for banks to price deposits more aggressively once the federal funds rate exceeds about 3% as an instrumental variable; this produces an estimate roughly three times as large, with growth falling to about 6%. A placebo test on non-stablecoin crypto assets found no similar effect.