BIS research says rate hikes curb stablecoin growth
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AI-assisted source synthesis · not an independent investigation.
A BIS working paper examines the relationship between bank deposit rates and stablecoin growth based on weekly U.S. data from January 2019 to June 2025. The paper says that for every 1 basis point increase in U.S. bank deposit rates, the average 10-week growth rate of stablecoins would fall from about 15% to about 12%; another method used to identify causality estimates that the growth rate could fall to about 6%. By currency, USDC growth declines by about 4.8 percentage points, while USDT declines by about 1.9 percentage points. The paper recommends that regulators pay attention to whether stablecoin issuers pay returns to holders and whether they require some reserves to be held in bank deposits.
AI-written from reports · updated 2 hours ago
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- CryptopolitanBIS working paper: A 1-basis-point rise in US bank deposit rates reduces stablecoin 10-week growth to about 12%
A BIS working paper finds that for every 1-basis-point increase in US bank deposit rates, the average 10-week stablecoin growth rate falls from about 15% to about 12%. Another method used to identify causality estimates that the growth rate could fall to about 6%; USDC’s growth rate declines by about 4.8 percentage points, while USDT’s declines by about 1.9 percentage points. The study uses weekly US data from January 2019 to June 2025 and recommends that regulators pay attention to whether stablecoin issuers pay yield to holders and whether they require part of reserves to be held in bank deposits.
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