Key facts
- Higher bank deposit rates slow stablecoin market growth.
- USDC growth was more affected by deposit rate hikes than USDT.
- Regulators should consider if stablecoin issuers can pay yield.
Banks may be using deposit rates as a counterweight to slow customer migration to stablecoins, according to a new working paper from the Bank for International Settlements (BIS). Researchers analyzed U.S. data from January 2019 to June 2025 and found that increases in bank deposit rates correlated with slower growth in stablecoin market capitalization. The effect was more pronounced for Circle's USDC, which has closer ties to U.S. users, compared to Tether's USDT. The paper suggests that banks "retain some influence over the pace of that adoption through deposit pricing." The findings come as regulators in Washington are considering rules for stablecoins, including the implications of issuers paying yield on holdings.