Banks Hold a Lever Over Stablecoin Adoption, BIS Economists Say
60-second summary
Banks’ deposit‑rate hikes curb stablecoin expansion, BIS economists report, noting that when U.S. banks raise rates, overall stablecoin growth slows and Circle’s USDC reacts most sharply, shedding volume as investors seek higher‑yielding deposits; the finding suggests that traditional banking policy can directly dampen crypto‑stablecoin demand, potentially slowing broader digital‑currency adoption.
A Bank for International Settlements working paper found that stablecoin growth slows when U.S. banks raise deposit rates, with Circle’s USDC most sensitive.