Stablecoin Growth Cooled as Deposit Rates Rose, With USDC Most Exposed, Working Paper Says
By Unchained
AI summary of the source article
A Bank for International Settlements working paper found that stablecoin growth slowed when U.S. banks raised deposit rates. The cooling effect was stronger for Circle's USDC than Tether's USDT due to differing user demographics.
Why it matters
The authors conclude that “The size of the stablecoin sector therefore depends in part on how banks price deposits” and that banks “retain some influence over the pace of that adoption through deposit pricing.”
Key facts
- A BIS working paper found that rising U.S. bank deposit rates slowed reserve-backed stablecoin growth between January 2019 and June 2025.
- A 1 basis point rise in deposit rates trimmed USDC's 10-week growth by about 5%, compared to roughly 2% for Tether's USDT.
- The authors describe the study as 'the first empirical evidence' that shifts in bank deposit rates impact stablecoin flows.
Source excerpt · Unchained
Using six years of weekly U.S. data, two economists found stablecoins grew more slowly after banks raised deposit rates, while cautioning that their evidence covers a single high-rate period. The post Stablecoin Growth Cooled as Deposit Rates Rose, With USDC Most Exposed, Working Paper Says appeared first on Unchained .