BIS Working paper says higher bank deposit rates slow stablecoin growth
BIBIBI
AT A GLANCE
BIS The working paper says that higher bank deposit rates may slow stablecoin growth.
Article
【BIS paper: Rising bank deposit rates will slow stablecoin growth】October 18, a working paper by the Bank for International Settlements (BIS) finds that higher bank deposit rates slow stablecoin growth, with both competing for the same pool of funds. The paper, titled “Are Stablecoins and Bank Deposits Substitutes?”, is Working Paper No.BIS Working Paper No. 1382 published on October 13, authored by Rashad Ahmed and Iñaki Aldasoro. It concludes that reserve-backed stablecoins are partial substitutes for traditional bank deposits. The study is based on weekly U.S. data from 2019 to January 2025 June; during this period, stablecoin market capitalization rose from less than 5000000000 USD to more than 220000000000 USD，10, with an average weekly growth rate of approximately 15%. The core result shows that for every 1 basis-point increase in deposit rates, stablecoin market capitalization growth over a 10-week window decreases by approximately 3 percentage points; under instrumental-variable estimation, the effect rises to approximately 9 percentage points. By type,USDC shows a stronger response, at approximately 4.8 percentage points, while USDT is 1.9 percentage points; the pattern also holds for stablecoins deployed on DeFi protocols.
Key points
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A Bank for International Settlements (BIS) working paper finds that higher bank deposit rates slow stablecoin growth.
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The paper is titled “Are Stablecoins and Bank Deposits Substitutes?” and is numbered BIS Working Paper No. 1382,October 13 published.
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The authors are Rashad Ahmed and Iñaki Aldasoro.
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The study uses weekly U.S. data from 2019 to January 2025 June.
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The paper says that reserve-backed stablecoins are partial substitutes for traditional bank deposits.
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During the sample period, stablecoin market capitalization rose from less than 5000000000 USD to more than 220000000000 USD，10, with an average weekly growth rate of approximately 15%。
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The paper’s core results show that for every 1 basis-point increase in deposit rates, stablecoin market capitalization growth over a 10-week window decreases by approximately 3 percentage points; under instrumental-variable estimation, the decrease is approximately 9 percentage points.
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By type,USDC has an estimated effect of approximately 4.8 percentage points, while USDT is approximately 1.9 percentage points.
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The pattern also holds for stablecoins deployed on DeFi protocols.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
The study treats bank deposits and stablecoins as two choices that may compete for the same pool of funds. When deposit rates rise, the paper’s data show that stablecoin market-capitalization growth may slow; the estimated effects differ across stablecoins.
Why it matters to readers
It suggests that changes in bank deposit returns may affect stablecoin growth, but these results come from a specific historical sample and the paper’s estimates; they do not mean that the same outcome will necessarily occur in the future.
If you follow stablecoins, you can first understand two concepts: a basis point is a unit of interest-rate change, 1 basis points equal 0.01 percentage points;DeFi refers to decentralized finance protocols on blockchains.
Risks and unknowns
The material does not include the original-paper link,BIS and the paper’s methods, sample, and conclusions still need to be verified.
The “October 18” in the material is not explained in terms of a specific year or context.
The research conclusions are based on U.S. data from 2019 to January 2025 June, and the material does not state whether they apply to other markets or future periods.
The estimated results in the paper describe associations and model results in the historical sample; they do not mean that stablecoins will necessarily change at the same rate in the future.
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Related concepts
Stablecoin
An asset that seeks to track a reference value and is subject to risks including depegging, reserves, and redemption.
