BIS just dropped a paper confirming what we already knew: when banks raise deposit rates, stablecoin growth slows down. Translation? Stablecoins and bank deposits are competing for the same capital.
The kicker: $USDC feels the pain way more than $USDT when rates go up. Makes sense — $USDC users are more rate-sensitive, probably parking cash for yields. $USDT holders? Different breed. More focused on trading, offshore liquidity, and getting around capital controls.
What this means for you:
• Fed rate cuts = bullish for stablecoins
• High rates = capital flows back to TradFi
• $USDC more elastic to macro than $USDT
Watch the Fed. When rates drop, stablecoin TVL will pump. That's your signal for more on-chain activity and risk-on behavior across DeFi.
The kicker: $USDC feels the pain way more than $USDT when rates go up. Makes sense — $USDC users are more rate-sensitive, probably parking cash for yields. $USDT holders? Different breed. More focused on trading, offshore liquidity, and getting around capital controls.
What this means for you:
• Fed rate cuts = bullish for stablecoins
• High rates = capital flows back to TradFi
• $USDC more elastic to macro than $USDT
Watch the Fed. When rates drop, stablecoin TVL will pump. That's your signal for more on-chain activity and risk-on behavior across DeFi.