Higher Bank Rates Temper USDC and USDT Growth, BIS Finds
A BIS working paper finds that higher US bank deposit rates were associated with slower stablecoin growth. It analysed 339 weeks of data from January 2019 to June 2025, during which reserve-backed stablecoin market capitalisation rose from less than $5 billion to more than $220 billion.
In the baseline estimate, a 1-basis-point increase in deposit rates was linked to stablecoin growth of about 12% over the following 10 weeks, below the roughly 15% average. A second method put growth near 6%. The slowdown appeared larger for USDC, whose 10-week growth was reduced by about 5%, than for USDT, at roughly 2%.
The authors caution that the evidence covers only one high-rate period and does not identify which holders or banks drove the change. The findings may inform debate over stablecoin rewards and reserve requirements, but growth remained positive in both estimates. For traders, higher deposit rates may curb stablecoin demand and expansion, though the study does not indicate that either token will lose its dollar peg.
Neutral
The findings point to slower stablecoin market-cap growth when bank deposit rates rise, with a stronger estimated effect on USDC than USDT. However, the study reports continued positive growth and does not show that either token’s dollar peg or market price is under pressure. In the short term, traders may monitor deposit-rate expectations and stablecoin supply or flows for signs of changing demand, but the research itself offers no clear directional price signal. Over the longer term, any effect depends on interest rates, stablecoin adoption and possible changes to yield or reserve rules. Since USDC and USDT are designed to track the US dollar, the direct price impact is likely limited; the more relevant risk is a change in usage or liquidity, not an expected move away from $1.