{"id":3045,"date":"2026-10-18T14:58:20","date_gmt":"2026-10-18T14:58:20","guid":{"rendered":"https:\/\/tcjsj.com\/?p=3045"},"modified":"2026-10-18T14:58:20","modified_gmt":"2026-10-18T14:58:20","slug":"rising-interest-rates-act-as-a-natural-check-on-stablecoin-growth-bis-finds","status":"publish","type":"post","link":"https:\/\/tcjsj.com\/?p=3045","title":{"rendered":"Rising Interest Rates Act as a Natural Check on Stablecoin Growth, BIS Finds"},"content":{"rendered":"

For years, traditional banking institutions have viewed the rapid ascent of stablecoins with a mix of trepidation and strategic concern. As digital assets pegged to the U.S. dollar gained traction, commercial banks feared a potential "digital run"\u2014a scenario where customers abandon traditional, interest-bearing savings accounts in favor of stablecoins, which offer the convenience of blockchain-based transactions without the traditional friction of the banking system. However, a new working paper published by the Bank for International Settlements (BIS) suggests that banks may possess a potent, built-in mechanism to retain their customer base: the standard interest rate on savings accounts.<\/p>\n

The study, authored by BIS economist I\u00f1aki Aldasoro and Rashad Ahmed of the Andersen Institute for Finance and Economics, provides a granular look at the competitive dynamics between legacy banking and the crypto-native financial ecosystem. By analyzing weekly U.S. data spanning from January 2019 through June 2025, the researchers identified a consistent, inverse correlation between the interest rates offered on traditional bank deposits and the growth trajectory of stablecoin market capitalization. <\/p>\n

The Competitive Power of Traditional Deposits<\/h3>\n

The findings suggest that the growth of stablecoins is not an unstoppable tide, but rather one that ebbs and flows in response to the monetary policy decisions made by commercial lenders. According to the BIS paper, stablecoin market capitalization historically grew by approximately 15% over a typical 10-week period within the dataset. However, when banks increased their deposit rates, that growth slowed significantly.<\/p>\n

The researchers observed that even a modest one-basis-point increase in deposit rates\u2014a move that might seem marginal in the context of broader economic cycles\u2014had a tangible impact. Under the authors’ baseline estimate, that one-basis-point bump successfully curtailed stablecoin growth from 15% to roughly 12%. When applying a more rigorous methodology designed to isolate direct cause and effect, the researchers found that the impact was even more pronounced, with growth dropping to approximately 6%. While the study confirms that stablecoins have maintained a consistent growth trajectory, it highlights that their expansion is demonstrably sensitive to the interest rate environment.<\/p>\n

To isolate these findings from mere market coincidence, the authors utilized a specific quirk in how banks manage their pricing strategies. Historically, commercial lenders are hesitant to pass on interest rate hikes to savers until the federal funds rate crosses the 3% threshold. Once that benchmark is cleared, however, banks tend to reprice their savings accounts much more aggressively. By tracking this behavioral shift, the researchers were able to establish a clearer link between banking policy and digital asset adoption.<\/p>\n

Nuance in the Digital Asset Market<\/h3>\n

The study also revealed that this competitive tension is not uniform across all stablecoin issuers. The relationship between interest rates and growth was found to be notably stronger for Circle\u2019s USDC than for Tether\u2019s USDT. The authors attribute this disparity to the user demographics and the underlying utility of the assets. Because USDC maintains closer ties to U.S.-based users and institutional workflows, it appears more directly impacted by the shifting landscape of U.S. domestic interest rates.<\/p>\n

This leads to a critical conclusion for the banking sector: while they cannot ignore the rise of decentralized finance, they still wield considerable influence over the pace of digital asset adoption through their own deposit pricing strategies. By offering competitive yields, banks can effectively retain liquidity that might otherwise migrate to the stablecoin ecosystem.<\/p>\n

However, the authors are careful to include several caveats regarding the scope of their research. As is standard for BIS working papers, the findings represent the views of the individual authors rather than the official stance of the Bank for International Settlements. Furthermore, the sample period covers a specific high-rate cycle during which most major stablecoins did not provide yield to their holders. This is a significant distinction, as the introduction of yield-bearing stablecoins could fundamentally alter the competitive balance identified in the paper.<\/p>\n

\"Banks<\/figure>\n

Regulatory Implications and the Legislative Landscape<\/h3>\n

The BIS study arrives at a time when the debate over the future of stablecoins has reached a fever pitch in Washington. Regulators are currently grappling with the question of whether stablecoin issuers should be permitted to offer yield to their holders, a move that would pit them directly against money market funds and bank savings accounts. <\/p>\n

This issue has become a central point of contention in the halls of Congress. Financial institutions have actively lobbied to keep stablecoin yield off the table, fearing that if issuers are allowed to pay interest, the competitive advantage identified by the BIS study could evaporate. This tension was clearly visible during the failed Senate vote on the Clarity Act, where the prospect of stablecoin regulation became a focal point for opposing industry interests.<\/p>\n

The legislative environment is further complicated by the implementation of the GENIUS Act. Signed into law by President Donald Trump in July of last year, the act effectively legalized stablecoins in the United States, providing a comprehensive framework for their issuance, use, and custody. As of this coming January, the regulatory mandates stemming from the act are set to take effect. In preparation, key U.S. regulatory bodies\u2014including the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Treasury Department\u2014are currently drafting the specific rules of the road. <\/p>\n

These agencies are carefully weighing the systemic trade-offs, including whether to require stablecoin issuers to hold a portion of their reserves in traditional bank deposits. Such a requirement would effectively create a symbiotic, if uneasy, relationship between the two sectors, potentially mitigating some of the liquidity risks that regulators worry could emerge if stablecoins were to scale unchecked.<\/p>\n

A Long-Standing Regulatory Scrutiny<\/h3>\n

The BIS has long maintained a posture of caution regarding the proliferation of digital assets. Their interest in the subject is not new; as early as 2021, the organization argued that the rise of blockchain-based digital dollars underscored an urgent need for central banks to develop their own Central Bank Digital Currencies (CBDCs). The goal, from the BIS perspective, is to ensure that sovereign money retains its central role in the global financial system even as the underlying technology of payments shifts.<\/p>\n

In a 2023 survey, the BIS further cautioned that the widespread adoption of stablecoins could pose substantial risks to financial stability, particularly if they are used as a primary medium of exchange without the oversight frameworks typically applied to banks. The latest working paper serves as a continuation of this broader analytical effort, providing policymakers with empirical data to navigate the transition between traditional banking and the evolving digital economy.<\/p>\n

As the implementation of the GENIUS Act approaches and the Federal Reserve continues to navigate interest rate adjustments, the findings from Aldasoro and Ahmed offer a valuable roadmap. They suggest that the "threat" of stablecoins is as much a function of monetary policy as it is of technological innovation. By maintaining competitive interest rates, the traditional banking sector continues to hold a significant, if waning, advantage in the struggle for capital retention. Whether this dynamic persists as the regulatory environment matures and stablecoin issuers begin to explore new yield-generation models remains one of the most critical questions facing global financial regulators today.<\/p>\n","protected":false},"excerpt":{"rendered":"

For years, traditional banking institutions have viewed the rapid ascent of stablecoins with a mix of trepidation and strategic concern. As digital assets pegged to the U.S. dollar gained traction, commercial banks feared a potential "digital run"\u2014a scenario where customers abandon traditional, interest-bearing savings accounts in favor of stablecoins, which offer the convenience of blockchain-based […]<\/p>\n","protected":false},"author":18,"featured_media":3044,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[487],"tags":[490,489,460,488,85,1858,4670,4000,1017,1040,1121,491],"class_list":["post-3045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency-web3","tag-bitcoin","tag-blockchain","tag-check","tag-crypto","tag-finds","tag-growth","tag-interest","tag-natural","tag-rates","tag-rising","tag-stablecoin","tag-web3"],"_links":{"self":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts\/3045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3045"}],"version-history":[{"count":0,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts\/3045\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/media\/3044"}],"wp:attachment":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}