October 13th 2026, 11:10 PM
US Deposit Rates Hinder Stablecoin Adoption, BIS Model Reveals
Key Summary
A study by the Bank for International Settlements finds that US deposit rates significantly impact stablecoin adoption, with a 1-basis-point increase associated with a 4.8% decline in USDC growth over ten weeks, compared to 1.9% for USDT. The study highlights the distinct competitive pressures faced by each stablecoin issuer, with USDC's larger response attributed to its closer connections to US institutional and decentralized finance users.
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Study Reveals Impact of US Deposit Rates on Stablecoin Adoption
A study released by the Bank for International Settlements on October 13 links bank deposit repricing to a larger estimated slowdown in USDC growth than in USDT growth, so banks' offers can shape stablecoin adoption differently for each issuer.Deposit Rate Impact on USDC and USDT
Higher deposit rates give holders a stronger financial reason to keep balances at a bank. In the study, a one-basis-point deposit-rate increase was associated with about 4.8% less cumulative USDC growth over ten weeks, compared with 1.9% less growth for USDT.Competition Among Stablecoin Issuers
Exchanges can offer variable rewards to eligible customers, adding another price to the competition for balances. That makes the historical issuer split useful for adoption forecasts while leaving today's bank-versus-platform comparison to be established.Deposit Rate Measure and Its Limitations
The paper's deposit-rate measure averages six national savings and money-market deposit-account series. It is distinct from the Federal Reserve's policy rate and from the rate on any particular high-paying account.Conclusion
The evidence supports competition, but its magnitude depends on the model and sample. Rewards change what holders compare, and the return on a stablecoin balance is also shaped by the platform on which it sits.Related Reading
Stablecoins are becoming a central bank problem hidden in plain sight.#USDC#USDT#Stablecoins#BIS