A small increase in what U.S. banks pay depositors may reduce the pace at which stablecoins expand, according to a Bank for International Settlements working paper. The research suggests that more attractive bank accounts can make it less appealing for savers to move money into digital tokens such as Circle’s USDC and Tether’s USDT.
Deposit rates and stablecoin growth
Researchers Rashad Ahmed and Iñaki Aldasoro examined weekly data from January 2019 through June 2025. Their analysis took account of bitcoin prices, Treasury yields and wider financial conditions before assessing the relationship between bank deposit rates and stablecoin market capitalization.
The paper found that a one-week increase of one basis point in average U.S. bank deposit rates was associated with slower stablecoin growth. A basis point is one-hundredth of a percentage point, meaning the increase studied was just 0.01 percentage points.
Under the paper’s main estimate, the rate increase reduced average stablecoin growth over the following 10 weeks from roughly 15% to about 12%. The finding indicates that even a modest improvement in the return available from bank deposits can affect the speed of stablecoin expansion, although it did not cause the market to contract.
The researchers also tested an alternative approach designed to account for the possibility that banks raise deposit rates because stablecoin growth is already accelerating. On that basis, the effect was approximately three times larger, with 10-week growth slowing to around 6%. The authors cautioned, however, that this method had some weaknesses.
USDC showed the stronger relationship
The connection between deposit pricing and token growth was more pronounced for Circle’s USDC than for Tether’s USDT. The authors said that pattern was consistent with USDC having closer ties to U.S. users.
Stablecoins are digital tokens designed to maintain a relatively stable value, commonly against a fiat currency such as the U.S. dollar. They can be used to move money within crypto markets and, depending on the product, may compete with bank deposits for funds held by customers.
The BIS paper does not show that banks have already lost deposits or reduced lending as a result of stablecoin growth. Instead, it points to deposit rates as one channel through which banks may retain some influence over the pace of adoption. The researchers wrote that banks “retain some influence over the pace of that adoption through deposit pricing.”
The findings are subject to important limits. The sample includes one period in which interest rates were high, so the relationship could change in a different market environment. The authors also noted that the results may evolve as yield-bearing stablecoins and tokenized money market funds become more widespread.
Why deposits matter to banks
The issue has attracted attention because deposits are an important source of bank funding. Bank executives have warned that money moving from traditional accounts into stablecoins or related products offering returns could affect the funds available for lending.
Bank of America Chief Executive Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and associated return-generating products. He said such a shift could reduce lending capacity and increase borrowing costs.
The impact also depends on what stablecoin issuers do with their reserves. A December analysis by Federal Reserve staff explained that money transferred into stablecoins can return to banks as deposits held by the issuers. In that case, the overall amount of deposits may not change, but the identity of the deposit holders supplying bank funding can change.
Stablecoin-related balances may also be larger and uninsured, potentially requiring banks to hold more liquid assets and leaving less room for the long-term loans financial institutions make. At the same time, raising deposit rates to keep customers would increase banks’ funding costs.
The Federal Reserve analysis suggested that banks could offer better rates selectively to customers most likely to move their money, while paying less to depositors considered less mobile. The BIS research therefore adds to a broader debate over how competition from digital money could affect bank funding, even though it does not establish that stablecoins have already weakened lending.
Current market picture
Moneyiar market data recorded the STABLE asset at $0.025585033 at 21:29 on October 17, 2026. It was down 2.92% over 24 hours and 5.87% over seven days. The data identifies the asset as “Stable”; it does not establish that it is a stablecoin discussed in the BIS paper.
According to CoinDesk, the BIS research indicates that bank deposit pricing may influence stablecoin adoption, but the study’s limited sample and the changing range of yield-generating digital products mean its conclusions should be interpreted cautiously.
