BIS Study Finds 0.01% Rise in Bank Deposit Rates Can Cut Stablecoin Growth
A study by the Bank for International Settlements (BIS) has found that a small increase in US bank deposit rates can significantly affect stablecoin market capitalization growth. According to the findings cited by Coin Bureau, a rise of just 1 basis point, equivalent to 0.01 percentage points, in deposit rates reduces stablecoin market capitalization growth by roughly 3 percentage points over a 10-week period.
The reported effect is notable against average stablecoin market capitalization growth of about 15% over the period. The findings suggest that even a modest change in the interest banks offer depositors can influence the pace at which stablecoins expand, highlighting the relationship between traditional banking products and digital-dollar alternatives.
Higher Deposit Rates and Stablecoin Growth
The study's reported results connect bank deposit pricing with changes in stablecoin markets capitalization. When banks increase the rates paid on deposits, holding money in traditional bank accounts can become more attractive relative to alternatives. The BIS study found that a 1-basis-point increase in US deposit rates was associated with an approximately 3-percentage-point reduction in stablecoin market capitalization growth over 10 weeks.
The comparison is significant in the context of the reported average growth rate of around 15%. The estimated reduction represents a substantial change relative to that baseline, although the source does not provide further details about the study's methodology, sample period or the precise mechanisms behind the relationship.
The findings do not mean that stablecoin market capitalization necessarily declines by 3%. Rather, the reported result concerns a reduction in the growth rate, meaning expansion may be slower than it otherwise would have been during the measured period.
USDC Shows a Stronger Response Than USDT
The effect was stronger for USD Coin (USDC) than for Tether (USDT), according to the summary shared by Coin Bureau. The study's authors linked the difference to USDC's closer ties to US savers.
This distinction indicates that the relationship between deposit rates and stablecoin growth may vary across individual stablecoins. Although both USDC and USDT are dollar-pegged stablecoins, the reported findings suggest that their market capitalization growth may not respond equally to changes in US bank deposit rates.
The source does not provide separate numerical estimates for USDC and USDT, so the size of the difference between their responses cannot be established from the information available in the post.
Major US Banks Still Pay Nothing on $1.6 Trillion in Deposits
The discussion comes alongside a report cited from the Financial Times that JPMorgan, Bank of America (BofA) and Wells Fargo continue to pay no interest on $1.6 trillion of their deposits.
The figure underscores the scale of deposits held at three major US banks for which customers reportedly receive no interest. However, the source does not specify how the $1.6 trillion is divided among the banks or provide further details about the types of accounts included.
Taken together, the findings cited by Coin Bureau connect two aspects of the financial system: the rates banks offer depositors and the growth of dollar-pegged stablecoins. The BIS study's central estimate is that a 0.01-percentage-point increase in US deposit rates corresponds to roughly 3 percentage points less stablecoin market capitalization growth over 10 weeks, compared with average growth of about 15%.
Writer: Victoria HaleTechnology & Blockchain WriterVictoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.She prioritises clarity and accuracy when explaining technical developments to a general audience.
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