BIS Research Finds Higher Savings Rates Could Slow Stablecoin Adoption

In brief

• A recent BIS working paper analyzing U.S. data from 2019‑2025 discovered that elevated bank deposit rates correlate with slower growth of the stablecoin market.
• The impact proved more pronounced for Circle’s USDC compared to Tether’s USDT, reflecting USDC’s tighter connection to U.S. users.
• The authors advise regulators to consider whether issuer‑paid yields are sustainable, noting these conclusions reflect their analysis rather than official BIS policy.

Banks concerned about attracting customers away toward stablecoins may already possess a countermeasure: competitive savings rates.

The study, released by the Bank for International Settlements—a Basel‑headquartered institution serving central banks—examined weekly U.S. data spanning January 2019 to June 2025. BIS economists IñAKi Aldasoro and Rashad Ahmed highlighted that rising bank deposit rates correspond with decelerated stablecoin market growth.

Across the dataset, stablecoin market capitalization expanded by approximately 15 % over a usual ten‑week interval. A modest increase of one basis point in deposit rates—or even rapid shifts in low‑yield savings accounts—reduced this expansion to around 12 % according to the authors’ initial model. Applying a second econometric approach that isolates causality lowered the figure to roughly 6 %, indicating continued growth albeit at a slower pace.

The authors exploit a behavioral trait where lenders typically postpone raising savings rates until the federal funds rate climbs past three percent, then adjust monetary policy more aggressively. This dynamic explains why savings accounts respond swiftly once deposit thresholds are crossed.

Consequently, the authors contend that banks exercise measurable influence over adoption velocity by adjusting deposit prices.

Stablecoin market capitalization grew by about 15% over a typical 10‑week span in the sample used by the researchers. A one‑basis‑point bump in deposit rates, a sizable weekly move for slow‑moving savings rates, cut that to roughly 12% under the authors’ baseline estimate. Under a second method designed to isolate cause and effect, it fell to about 6%. Stablecoins kept growing, just more slowly.

To separate cause from coincidence, the authors relied on a quirk in bank behavior. Lenders barely raise savings rates until the federal funds rate passes about 3%, and then they reprice much faster.

The link was stronger for Circle’s USDC than for Tether’s USDT, which the authors attribute to USDC’s tighter connection to U.S. users. The paper concludes that banks retain some influence over the pace of that adoption through deposit pricing.

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The findings come with caveats. Working papers reflect the authors’ views, not necessarily the BIS’s, and the sample spans a single high‑rate cycle in which stablecoins paid holders no interest.

The authors said regulators should weigh whether stablecoin issuers may pay holders yield, along with the trade‑offs of requiring issuers to keep part of their reserves in bank deposits.

This debate remains active in Washington. Banks have lobbied against including stablecoin yields in legislation, influencing the fate of the Clarity Act’s Senate vote. Meanwhile, the OCC, FDIC, and Treasury are drafting rules implementing the GENIUS Act, effective January. Signed into law by President Donald Trump in July, the GENIUS Act effectively legalized stablecoins in the United States and established guidelines for issuance, use, and custody.

The BIS has long monitored stablecoins and broader cryptocurrency issues. In 2021 it stressed that blockchain‑based digital dollars intensified urgency for central‑bank digital currencies, and a 2023 survey warned potential threats to financial stability if widespread adoption occurs.

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