Karla Barker 
A new working paper from the Bank for International Settlements suggests banks have a simple tool that might slow stablecoin growth: pay savers more. The paper looks at whether higher deposit rates can keep customers from moving cash into tokens such as $USDT and $USDC.
What the paper found
Researchers Rashad Ahmed and Iñaki Aldasoro used weekly data from January 2019 to June 2025. They controlled for bitcoin prices, Treasury yields and broader financial conditions. Their main result is that a one-week, one basis point rise in average bank deposit rates predicted slower stablecoin growth.
The size is small. One basis point is 0.01 percentage points. Even so, the paper says that move cut average ten-week growth in stablecoin market capitalization from about 15% to about 12%.
Under the authors’ preferred estimate, the effect was about three times larger. That estimate adjusts for banks raising rates in response to stablecoin growth. It put stablecoin growth at about 6%. The authors noted some weakness in that method. In both cases, growth slowed but did not reverse.
The link was stronger for Circle’s $USDC than for Tether’s $USDT. The authors said that fits $USDC’s closer ties to U.S. users.
Why deposits matter
The finding adds to a debate that has already drawn warnings from bank executives. Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products that offer returns. That could reduce lending capacity and raise borrowing costs.
Where stablecoin issuers put their reserves matters too. A December Federal Reserve staff analysis said money placed in stablecoins can return to banks as issuer deposits. That changes who supplies banks’ funding even when total deposits stay the same. Larger, uninsured balances could push banks to hold more liquid assets and leave less room for long-term loans. Paying more to keep customers also raises banks’ funding costs. The Fed analysis suggested banks could target better rates at customers most likely to switch while keeping lower rates for less mobile depositors.
What the study does not prove
The BIS paper does not establish losses of bank deposits or lending. Its sample covers one high-rate episode. The findings may change as yield-bearing stablecoins and tokenized money market funds gain ground. The authors wrote that banks still retain some influence over the pace of stablecoin adoption through deposit pricing.
That is a modest claim, but it matters for banks weighing how much to pay savers.