Banks may have a built-in tool to compete with stablecoins: deposit rates. According to a new working paper from the Bank for International Settlements, higher savings rates offered by traditional banks correspond with slower growth in the stablecoin market.
Using weekly U.S. data from January 2019 through June 2025, BIS economists Iñaki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics analyzed the relationship between deposit rates and stablecoin adoption. The researchers found that stablecoin market capitalization, which typically grew about 15% over a 10-week period in their sample, slowed to approximately 12% when deposit rates increased by one basis point under their baseline estimate. Using an alternative method to isolate causation, the growth rate fell to about 6%.
The effect was notably stronger for Circle's USDC than for Tether's USDT, which the authors attributed to USDC's closer ties to U.S. users.
To establish causation rather than mere correlation, the researchers leveraged a documented pattern in bank behavior: lenders typically do not increase savings rates until the federal funds rate exceeds 3%, after which they reprice more rapidly.
The paper concludes that banks "retain some influence over the pace of that adoption through deposit pricing." However, the findings carry important limitations. The study covers a single high-rate cycle during which stablecoin issuers did not offer yield to holders, and the paper reflects the authors' views rather than the official positions of the BIS.
The authors recommended that regulators consider whether stablecoin issuers should be permitted to pay yield, as well as potential trade-offs from requiring issuers to maintain reserves in bank deposits.
The regulatory landscape for stablecoins in the United States remains contested. The GENIUS Act, signed into law in July, establishes a framework for stablecoin issuance, use, and custody, with implementing rules being developed by the OCC, FDIC, and Treasury ahead of a January deadline. The question of whether stablecoin issuers can offer yield has been a point of contention, with banks lobbying against such provisions during recent legislative efforts.
