How Banking Rates Impact Stablecoin Growth: A Closer Look at USDC and USDT

Recent research from the Bank for International Settlements (BIS) indicates that the growth of stablecoins may be more closely tied to traditional banking systems than many investors previously thought. When banks raise their deposit rates, this can lead to a noticeable decrease in the demand for stablecoins, particularly affecting Circle's USDC more than Tether's USDT.

Impact of Bank Deposit Rates on Stablecoins

The investigation, conducted by researchers Rashad Ahmed and Iñaki Aldasoro, analyzed data related to the US banking sector and cryptocurrency from January 2019 to June 2025. The study found that even a minimal increase in bank deposit rates—by just 0.01 percentage points—correlates with an approximate 2.8 percentage point slowdown in the cumulative growth of stablecoin market capitalization over a span of ten weeks.

For context, the typical market growth during similar time frames was around 15%. Another method of statistical analysis in the study suggested a more significant decline, possibly close to nine percentage points in growth due to rising rates.

USDC's Increased Sensitivity

The findings bring to light a critical distinction between USDC and USDT. Following a one-basis-point increase in bank deposit rates, USDC’s growth was estimated to decrease by 4.8 percentage points, while USDT experienced a smaller decline of only 1.9 percentage points. This implies that USDC's growth is approximately 2.5 times more sensitive to changes in banking interest rates than USDT.

The study attributes this heightened vulnerability of USDC to its deeper ties with US depositors and the broader institutional financial landscape. Conversely, USDT's more extensive international usage may buffer it from fluctuations in American banking rates.

Questioning the Independence of Stablecoins

One of the more surprising conclusions drawn from this research is that traditional banks may wield considerable influence over the demand for stablecoins. Investors might seek the safety of interest-generating accounts rather than holding stablecoins, which do not earn interest. Thus, as banks offer more attractive returns, the allure of stablecoins might diminish.

However, it’s essential to note that this slowdown in growth does not necessarily equate to a drop in the overall prices of stablecoins or an immediate loss in market capitalization. It simply reflects a shift in investor preferences based on the prevailing interest rates.

Final Thoughts

This study poses significant implications for how stablecoins interact with the wider financial ecosystem. While USDT appears more resilient due to its diverse usage, the research does not conclusively state that it is safer than USDC. Instead, it opens a discussion about how the future of stablecoins might evolve in relation to traditional banking practices and interest rates.