Deposit Rate Hikes Slow Stablecoin Growth

A new BIS working paper shows that each one-basis-point rise in U.S. deposit rates cuts stablecoin growth over ten weeks by about three percentage points, trimming average expansion from 15 % to 12 %.

Economists Inaki Aldasoro and Rashid Ahmed examined weekly U.S. data from January 2019 through June 2025. During this span, stablecoin market value climbed from under $5 billion to over $220 billion. An alternative identification method found an even steeper slowdown, down to roughly 6 %.

The effect hit USDC harder, with a 4.8-point drop per basis point, compared with 1.9 points for USDT. The authors attribute the gap to USDC’s closer ties to U.S. depositors.

Above the 3 % rate threshold, banks compete more aggressively for savers while stablecoins still offer no yield. Regulators could steer this dynamic by letting issuers pay returns or by requiring part of reserves to sit in bank deposits.

Based on information from cryptonews.net