One basis point is 0.01 percentage points, a rate change too small for most savers to notice. A new working paper from the Bank for International Settlements (BIS) found that a move that small still lined up with slower growth in stablecoins like USDT and USDC.
The headline finding comes with limits. Banks may be able to slow stablecoin growth by paying depositors more. The paper doesn’t show they can stop it.
What a single basis point did
Researchers Rashad Ahmed and Iñaki Aldasoro used weekly data from January 2019 to June 2025. They controlled for bitcoin prices, Treasury yields and broader financial conditions. In their data, a one-week, one basis point rise in average bank deposit rates predicted slower stablecoin growth.
In concrete terms, average 10-week growth in stablecoin market capitalization fell from about 15% to about 12%, the paper found.
The authors’ preferred estimate goes further. It adjusts for the fact that banks may raise rates because stablecoins are growing, and under that model the effect was roughly three times larger, slowing growth to about 6%. But the authors flagged some weakness in that method, so the bigger number deserves more caution than the smaller one.
Neither model showed growth going into reverse. It slowed down and kept going.
USDC reacts more than USDT
The two biggest stablecoins didn’t respond the same way. The link was stronger for Circle’s USDC than for Tether’s USDT, which the authors said was consistent with USDC’s closer ties to U.S. users.
That fits how the mechanism would work. A dollar holder who can choose between a U.S. bank account and a stablecoin is the person a higher deposit rate is meant to win back.
Why bank CEOs keep raising this
Banks have been warning about this for a while. Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns, potentially reducing lending capacity and raising borrowing costs.
The picture is less simple than “money leaves banks.” A December Federal Reserve staff analysis explained that money placed in stablecoins can come back to banks as issuer deposits. Total deposits can stay the same while the source of a bank’s funding changes.
That shift still costs something. Larger, uninsured balances could require banks to hold more liquid assets, leaving less room for the long-term loans financial institutions issue.
Higher rates cost banks money too
Paying savers more to keep them raises a bank’s funding costs. The Fed analysis suggested banks could aim better rates at the customers most likely to switch, while keeping lower rates for depositors who are less likely to move.
In other words, if this plays out, your rate could depend on how likely your bank thinks you are to leave.
What the paper doesn’t prove
The BIS paper doesn’t establish that banks lost deposits or lending. Its sample covers just one high-rate episode. The findings may change as yield-bearing stablecoins and tokenized money market funds gain ground, since those products compete on returns.
The authors kept their conclusion narrow. Banks “retain some influence over the pace of that adoption through deposit pricing,” they wrote. That gives banks some control over how fast this happens, not a way to block it, and it costs them money each time they raise rates.
