Banks could slow stablecoin growth by paying savers more, BIS paper finds
A BIS working paper found that a 1 basis point increase in U.S. bank deposit rates was linked with slower stablecoin growth, with ten-week growth moving from 15% to 12%. It also said the effect was stronger for Circle’s USD stablecoin. A separate write-up framed the same finding as part of a broader set of implications for monetary policy, regulation, and competition between banks and digital currencies.
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Users and market participants who follow stablecoins would notice this in the way bank deposit rates are now part of the picture around stablecoin growth. The detail matters most for people tracking Circle’s USD stablecoin, since the effect was described as stronger there.
In practice, the event puts bank deposit rates and stablecoin growth in the same frame rather than treating them as separate corners of the market. What stays the same is that the paper describes a relationship, not a rule that removes stablecoins from circulation or stops banks from changing rates. (per cryptobriefing.com)
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