Circle · U.S. Treasury · CoinDesk
Paying more to retain customers also raises banks’ funding costs
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★ Tier-1 Source
The BIS paper does not establish losses of bank deposits or lending.
Key facts
- Diversified RWA stablecoins sustain 5-7% yield from real credit as crypto funding compresses to ~4%
- That small figure, 0.01 percentage points, cut average ten-week growth in stablecoin market capitalization from about 15% to about 12%, the paper found
- Researchers Rashad Ahmed and Iñaki Aldasoro studied weekly data from January 2019 to June 2025, accounting for bitcoin prices, Treasury yields and broader financial conditions
- Banks may be able to slow the growth of stablecoins like USDT and USDC by paying savers more, according to a working paper published by the Bank for International Settlements (BIS)
Summary
A BIS working paper found a 1 basis point rise in U.S. bank deposit rates predicted slower stablecoin growth, cutting ten-week growth from 15% to 12%. The effect was stronger for Circle's USDC than Tether's USDT, which the authors linked to USDC's closer ties to U.S. users. The authors say banks retain some influence over stablecoin adoption through deposit pricing, though the sample covers only one high-rate period. Banks may be able to slow the growth of stablecoins like USDT and USDC by paying savers more, according to a working paper published by the Bank for International Settlements (BIS). Researchers Rashad Ahmed and Iñaki Aldasoro studied weekly data from January 2019 to June 2025, accounting for bitcoin prices, Treasury yields and broader financial conditions.