US Deposit Rates Impact USDC Adoption Differently Than USDT, BIS Study Shows
A Bank for International Settlements study reveals that rising US bank deposit rates slow USDC growth significantly more than USDT adoption.
US Deposit Rates Impact USDC Adoption Differently Than USDT, BIS Study Shows
A Bank for International Settlements study reveals that rising US bank deposit rates slow USDC growth significantly more than USDT adoption.
BIS Study Examines USDC Adoption and Bank Rates
A research paper published by the Bank for International Settlements on Oct. 13 investigates how bank deposit repricing affects stablecoin growth. According to the findings, higher bank deposit rates create a stronger financial incentive for holders to maintain balances within the traditional banking system rather than moving into digital assets.
The study demonstrates that USDC adoption experiences a more pronounced slowdown in response to rising bank deposit rates compared to USDT. Researchers Rashad Ahmed and Iñaki Aldasoro utilized weekly data spanning from January 2019 through June 2025 to analyze these market dynamics.
Contrasting Responses Between USDC and USDT
The data indicates that a one-basis-point increase in deposit rates corresponds with approximately 4.8% less cumulative growth for USDC over a ten-week period. In contrast, USDT exhibits a more modest impact, showing about 1.9% less growth under the same conditions.
The authors attribute the disparity to the distinct user bases of the two stablecoins. USDC maintains closer ties to United States institutional and decentralized finance participants who actively evaluate traditional bank yields against stablecoin balances, whereas USDT is more commonly associated with offshore and developing-economy applications.
Statistical Models and Methodology
The research employed ordinary least squares as a baseline statistical model alongside an instrumental-variable approach designed to isolate the effects of deposit repricing. Controls were implemented for policy rates, Treasury rates, Bitcoin prices, the dollar index, and market volatility to differentiate direct deposit competition from broader market shifts.
While the instrumental-variable model produced a larger aggregate estimate of about 9.1% less growth per basis point, the authors noted limitations regarding instrument weakness and limited high-rate episodes in the sample. Consequently, the findings highlight that uniform adoption forecasts across different stablecoins can obscure distinct competitive pressures.
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