A new study by the Bank for International Settlements (BIS) suggests that traditional banks can slow the growth of stablecoins by offering higher deposit rates. The research, based on U.S. data from January 2019 to June 2025, found that a one-basis-point increase in deposit interest rates reduced stablecoin market capitalization growth by roughly three percentage points, from an average of 15% over 10 weeks to about 12%. A more refined method estimated an even larger impact, cutting growth to around 6%.
The findings highlight the competitive dynamic between banks and stablecoins, as higher deposit rates make traditional accounts more attractive. The effect was stronger for Circle’s USDC than Tether’s USDT, likely due to USDC’s closer ties to U.S. institutional users. The study also controlled for broader financial conditions, such as Federal Reserve policy rates and market volatility, to isolate the impact of deposit pricing.
The research comes amid ongoing debates over stablecoin regulation, particularly the Clarity Act’s failed Senate vote and the implementation of the GENIUS Act’s stablecoin framework. While the study does not quantify the long-term impact on bank deposits or lending, it identifies a mechanism through which banks can influence stablecoin adoption. However, the authors caution that results may vary under different market conditions or if stablecoin issuers begin offering yield.
For banks, the findings suggest that defending their deposit base involves both regulatory advocacy and commercial strategies, such as adjusting deposit rates. While higher rates can deter stablecoin adoption, they also come with their own costs, requiring careful consideration by financial institutions.