A single basis point, or 0.01 percentage points, is a rate shift so tiny that most savers would never notice it. Even so, a new Bank for International Settlements (BIS) working paper found that a change of that size coincided with slower growth in stablecoins such as USDT and USDC.
That main result has its limits. Paying depositors more may let banks slow the growth of stablecoins, but the paper does not show that banks can stop it.
The effect of one basis point
The researchers, Rashad Ahmed and Iñaki Aldasoro, worked with weekly data running from January 2019 to June 2025. Their analysis controlled for bitcoin prices, Treasury yields and wider financial conditions. Across that data, a one basis point increase in average bank deposit rates over one week predicted slower stablecoin growth.
Put in numbers, the paper found that average 10-week growth in stablecoin market capitalization dropped from roughly 15% to roughly 12%.
The estimate the authors prefer points to a bigger effect. That model accounts for the possibility that banks raise rates in response to stablecoin growth, and it put the impact at about three times larger, with growth slowing to about 6%. The authors noted some weaknesses in this approach, though, so the larger figure calls for more caution than the smaller one.
In neither model did growth turn negative. It slowed, but it continued.
USDC is more sensitive than USDT
The two largest stablecoins reacted differently. The relationship was stronger for Circle’s USDC than for Tether’s USDT, a pattern the authors said matched USDC’s closer connection to U.S. users.
That is in line with how the mechanism should operate. Higher deposit rates are aimed at winning back exactly the kind of dollar holder who can pick between a U.S. bank account and a stablecoin.
Why bank chiefs keep bringing it up
Banks have been sounding the alarm on this for some time. In January, Bank of America CEO Brian Moynihan cautioned that up to $6 trillion in deposits could shift into stablecoins and similar yield-offering products, which could shrink lending capacity and push borrowing costs higher.
Reality is more complicated than money simply leaving the banking system. A Federal Reserve staff analysis from December pointed out that funds put into stablecoins can flow back to banks as issuer deposits. Overall deposits can hold steady even as the makeup of a bank’s funding changes.
That change is not free. Bigger uninsured balances could force banks to keep more liquid assets on hand, leaving less capacity for the long-term loans financial institutions make.
Raising rates isn’t cheap for banks either
Offering savers more to keep them around pushes up a bank’s funding costs. According to the Fed analysis, banks could direct better rates at customers most likely to switch while keeping rates lower for depositors less inclined to leave.
Put simply, if that happens, the rate you get could hinge on how likely your bank thinks you are to walk away.
The paper’s limits
The BIS paper does not show that banks lost deposits or lending. Its sample spans only one period of high rates. Its conclusions could shift as yield-bearing stablecoins and tokenized money market funds grow, because those products compete on returns.
The authors framed their conclusion carefully. Banks “retain some influence over the pace of that adoption through deposit pricing,” they wrote. That gives banks some say over how quickly adoption happens, not a way to prevent it, and every rate increase comes at a cost to them.