Stablecoin Growth Slows When Bank Deposit Rates Rise: BIS

A BIS paper links higher bank deposit rates to slower stablecoin growth, while a new report shows stablecoin remittances costing far less than traditional transfers.

Higher interest rates on ordinary bank deposits appear to put a brake on stablecoin growth, according to a new working paper from the Bank for International Settlements. At the same time, a separate industry report shows stablecoin-powered remittances beating traditional transfer channels on both cost and speed. The two findings pull in different directions, and together they frame the central question for holders of USDT and USDC: what actually drives money into these tokens, and what pulls it back out?

What happened

BIS researchers Rashad Ahmed and Iñaki Aldasoro examined weekly data spanning January 2019 through June 2025. Their central finding is that a one-week, one basis point increase in average bank deposit rates — just 0.01 percentage points — predicted slower expansion of the stablecoin market. On the headline estimate, average ten-week growth in stablecoin market capitalization fell from roughly 15% to about 12%. Under the authors' preferred specification, the drag was around three times larger, pulling growth down to approximately 6%.

The paper also found the effect was more pronounced for Circle's USDC than for Tether's USDT. The authors' interpretation is that banks retain meaningful influence over how quickly stablecoins spread, simply through the rates they pay on deposits.

Separately, Borderless.xyz published a cost comparison of stablecoin-funded remittances against traditional transfers. On a $200 transfer, stablecoin-funded remittances cost a median of 1%, or $2, versus 6.36%, or $12.72, through traditional channels — roughly 84% cheaper. Regional gaps were wide too: Sub-Saharan Africa saw 2.9% versus 8.46%, and Latin America 1.25% versus 5.64%. For a $10,000 transfer to the eurozone, the lowest-cost stablecoin provider charged as little as $26, against $52 at the median provider and $135 to $150 for a traditional international bank wire.

Settlement speed told a similar story. Brazil's PIX payouts completed in a median of two minutes, Mexico's SPEI in three minutes and Colombia's PSE in two, while SWIFT transfers typically settled the next business day, with the slowest 10% taking three business days. Completion rates varied more: Mexico's SPEI hit 98.6%, Brazil's PIX 97.8%, Colombia's PSE 79% and Costa Rica's SINPE 73%.

Why it matters for stablecoin growth

The BIS result matters because it challenges a simple narrative in which stablecoin adoption only ever moves in one direction. If deposit rates are competitive, some users appear to keep funds in bank accounts rather than converting to tokens. That is a real competitive constraint, and it becomes more relevant in periods when savings rates are attractive.

The finding should be read with care, however. The paper does not establish that deposits have actually left the banking system or that lending has shrunk. Its sample covers a single high-rate episode, so the relationship could shift as yield-bearing stablecoins and tokenized money market funds become more common. The authors themselves flagged some methodological weakness in the preferred estimate that produces the 6% figure, which is worth keeping in mind before treating that number as definitive.

The remittance data points the other way. Where stablecoins compete directly with costly legacy rails, the savings are large and measurable. For traders and holders, the practical takeaway is that stablecoin demand is not one market. It responds to local deposit rates on one side and to transfer costs and settlement speed on the other.

Market reaction

Live pricing on our exchange shows USDT at $0.998855, down 0.04% over 24 hours, with 24-hour volume of $41,237,710,528 and a market capitalization of $183,455,000,497. The modest move is consistent with a token trading near its peg rather than reacting sharply to research.

What to watch next

Deposit rate direction. If bank savings rates fall, the BIS relationship implies less headwind for stablecoin market cap growth.
Yield-bearing stablecoins. Products that pass returns to holders could weaken the deposit-rate brake the paper identifies.
Remittance corridors. Cost and completion data in regions like Sub-Saharan Africa and Latin America will show whether stablecoins keep taking share from traditional transfer operators.
Longer-term forecasts. Standard Chartered now expects the stablecoin market to reach $2 trillion by 2030, two years later than its prior estimate.

Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products, potentially reducing lending capacity and pushing borrowing costs higher. A December Federal Reserve staff analysis offered a partial counterpoint, noting that money placed in stablecoins can return to banks as issuer deposits. How that debate resolves will shape both bank funding costs and the pace of stablecoin growth.

FAQ

Why did higher bank deposit rates slow stablecoin growth?

According to the BIS paper, when banks pay more on deposits, holding funds in a bank account becomes relatively more attractive, so fewer users convert cash into stablecoins. The researchers found that even a one basis point rise in average deposit rates predicted weaker ten-week growth in stablecoin market capitalization.

How much cheaper are stablecoin remittances than traditional transfers?

Borderless.xyz reported that a $200 stablecoin-funded remittance cost a median of 1%, or $2, compared with 6.36%, or $12.72, through traditional remittance channels — roughly 84% cheaper. Costs differed by region, with Sub-Saharan Africa at 2.9% versus 8.46% and Latin America at 1.25% versus 5.64%.

Does the BIS study prove that stablecoins drain bank deposits?

No. The paper identifies a statistical relationship between deposit rates and stablecoin growth, but it does not establish losses of bank deposits or reduced lending. Its sample also covers only one high-rate period, and the authors noted some weakness in the method behind their preferred estimate.

Market snapshot

Prices at the time of writing (Oct 17, 2026 12:51 UTC).

USDT (USDT): $0.998855 — 24h -0.04%

Bank Deposit Rates Slow Stablecoin Growth, BIS Study Finds