A BIS working paper finds that a 1 basis point rise in U.S. bank deposit rates predicted slower stablecoin growth, cutting ten-week growth from about 15% to about 12%. The effect was stronger for Circle's USDC than Tether's USDT, which the authors link to USDC's closer ties with U.S. users. Under the authors' preferred estimate, which adjusts for banks raising rates in response to stablecoin growth, the impact was roughly three times larger, though growth slowed rather than reversed. The findings add evidence to a debate in which Bank of America's CEO warned that up to $6 trillion in deposits could move into stablecoins. The paper covers only one high-rate period and does not establish actual losses of deposits or lending.
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