Banks may have more room to push back against stablecoin adoption than some market participants assume. According to a new working paper published by the Bank for International Settlements, higher deposit rates can slow the pace at which stablecoins grow.
The paper was written by BIS economist Iñaki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics. Using weekly U.S. data from January 2019 through June 2025, the authors found that stablecoin growth weakened when banks raised rates on deposits.
Stablecoins kept expanding, but at a slower rate
In the sample used by the researchers, stablecoin market capitalization grew by about 15% over a typical 10-week span. Under the authors’ baseline estimate, a one-basis-point increase in deposit rates cut that growth to roughly 12%. For savings products that usually move slowly, the paper described a one-basis-point weekly increase as a sizable change.
The authors also used a second approach designed to separate cause from coincidence. Under that method, the same one-basis-point increase lowered 10-week stablecoin growth to about 6%. The paper did not say stablecoins stopped growing. It said they continued to expand, only more slowly.
How the authors identified causality
To distinguish correlation from causation, the paper relied on a pattern in bank behavior. Lenders tend to make only limited changes to savings rates until the federal funds rate rises above about 3%. After that threshold, they reprice deposits much faster.
The authors used that shift in bank pricing behavior to isolate the relationship between deposit rates and stablecoin adoption.
The effect was stronger for USDC than for USDT
The link was more pronounced for Circle’s USD Coin (USDC) than for Tether’s USDT. The paper attributed that difference to USDC’s closer ties to U.S. users.
In the authors’ words, banks “retain some influence over the pace of that adoption through deposit pricing.”
The paper also set out clear limits
The authors noted several caveats. First, working papers reflect the views of their authors and do not necessarily represent the official position of the BIS. Second, the sample covers only one high-rate cycle. It also covers a period in which stablecoins paid no interest to holders.
Against that backdrop, the paper said regulators should consider whether stablecoin issuers may be allowed to pay yield to holders. It also said policymakers should weigh the trade-offs involved in requiring issuers to keep part of their reserves in bank deposits.
Washington is already debating those questions
That policy fight is active in Washington. According to the report, banks have lobbied to keep stablecoin yield off the table, and that dispute hung over the failed Senate vote on the Clarity Act.
At the same time, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Treasury Department are drafting rules to implement the GENIUS Act, which takes effect in January. The report said the law, signed by President Donald Trump in July of last year, effectively legalized stablecoins in the United States and set rules for their issuance, use, and custody.
BIS has warned about stablecoins before
The BIS has spent years examining stablecoins and the broader crypto sector. In 2021, it argued that the rise of blockchain-based digital dollars made central bank digital currencies more urgent. In 2023, a BIS survey warned that widespread stablecoin adoption could threaten financial stability.