CryptoSlate
A Bank for International Settlements study estimates that each 1-basis-point increase in US deposit rates was associated with 4.8% less cumulative USDC growth over ten weeks, versus 1.9% less for USDT. The researchers used weekly data from January 2019 through June 2025, and estimate a 2.8% decline for stablecoins overall in their baseline model.
Why it matters
The gap suggests deposit pricing does not affect every stablecoin equally. The authors link USDC's larger response to its closer ties with US institutional and decentralized-finance users, who may compare bank deposits with stablecoin balances more directly. They associate USDT's smaller response with its offshore and developing-economy uses. These are interpretations of aggregate patterns, not evidence identifying which holders moved funds.
The rate measure averages six national savings and money-market deposit-account series. It is not the Federal Reserve policy rate or the rate on a particular account. Stablecoin holders may also compare bank returns with exchange rewards and DeFi yields, which vary by user and platform.
Market impact
A second model estimates a larger 9.1% reduction in cumulative growth per basis point, but rests on an instrumental-variable approach with limited evidence: its first-stage F-statistic is 9.78, below the conventional threshold of 10 cited by the authors, and the sample includes only one high-rate episode. In that model, USDC's 95% confidence band remains below zero, while USDT's includes zero.
The findings support a link between deposit repricing and stablecoin demand, but do not establish a fixed response across rate cycles. Nor can the USDC estimate be translated directly into lost bank lending: that would require evidence on reserve flows, bank funding replacement and credit decisions.
Frequently asked questions
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How did the BIS study measure the relationship between deposit rates and stablecoin growth?
Its baseline model compared changes in average US savings and money-market deposit rates with cumulative stablecoin growth over ten weeks, using weekly data from January 2019 through June 2025.
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Why did the study find a stronger deposit-rate link for USDC than USDT?
The authors interpret USDC's larger response as consistent with closer ties to US institutional and DeFi users. They associate USDT's smaller response with offshore and developing-economy uses.
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Does the study's deposit-rate measure represent the Federal Reserve policy rate?
No. It averages six national savings and money-market deposit-account series, and is distinct from the Fed policy rate and from the rate on any particular account.
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Why do the authors caution against relying on the larger 9.1% estimate?
The instrumental-variable model's first-stage F-statistic was 9.78, below the conventional threshold of 10 cited in the paper. The sample also contains only one high-rate episode.
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Can the USDC growth estimate be translated into lost bank lending?
No. Estimating an effect on lending would also require evidence on where stablecoin reserves go, how banks replace funding and how they adjust credit provision.
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