A new working paper from the Bank for International Settlements finds that stablecoins and bank deposits behave as partial substitutes, with higher deposit rates associated with slower reserv
A new working paper from the Bank for International Settlements finds that stablecoins and bank deposits behave as partial substitutes, with higher deposit rates associated with slower reserve-backed stablecoin growth, a finding that carries direct implications for how traditional banking decisions ripple into digital-asset markets.
BIS Working Paper 1382, titled "Are stablecoins and bank deposits substitutes?" and authored by Rashad Ahmed and Iñaki Aldasoro, was published on 13 October 2026. The study analyses weekly US data spanning January 2019 through June 2025, controlling for broader interest rates, Treasury yields, exchange rates, Bitcoin prices, volatility, and crypto-market developments. For related coverage, see Thieves Steal $4.8M Bitcoin From Task Scam Wallets.
BIS study sample Jan. 2019–Jun. 2025 Weekly US data used to assess whether reserve-backed stablecoins and bank deposits act as partial substitutes.The central finding is that when bank deposit rates rise, growth in reserve-backed stablecoins subsequently slows. The effect is specific to stablecoins: the authors ran a placebo test and found no comparable relationship for non-stablecoin cryptoassets, pointing to a substitution dynamic rather than a general crypto-risk or price effect. For related coverage, see Two Dormant Bitcoin Wallets Move 417 BTC After 12 Years.
The paper also reports that USDC shows a stronger response to deposit-rate changes than USDT does. The authors do not speculate on the exact mechanism, but the divergence likely reflects differences in holder demographics and use cases across the two largest dollar-pegged tokens by market capitalisation. Tether's market cap currently stands at approximately $183.5 billion, underscoring how large these markets have become relative to the banking system's deposit base. For related coverage, see Strive Bitcoin Holdings Reach 35,595 BTC as Wall Street Raises Price Target.
The practical implication is quantifiable. At the paper's illustrative average of 15% ten-week stablecoin growth, the ordinary-least-squares estimate implies roughly a 3-percentage-point reduction per basis point of deposit repricing, meaning growth could fall from around 15% to around 12% following a single basis-point rate move by banks.
Estimated ten-week growth reduction ≈3 percentage points BIS ordinary-least-squares illustration, conditional on its stated 15% average ten-week stablecoin-growth scenario.For Bitcoin-focused observers, the finding matters because stablecoin supply growth has historically correlated with on-chain liquidity and trading volumes across crypto markets. A deposit-rate environment that constrains stablecoin issuance could reduce the dollar-denominated liquidity that supports Bitcoin price discovery, without any direct change in Bitcoin network fundamentals. This dynamic is worth monitoring alongside traditional Bitcoin on-chain metrics such as exchange reserve levels and UTXO age distribution.
The BIS notes that if stablecoins become more widely used, they could affect banks' funding conditions and monetary-policy transmission. That concern is already drawing legislative attention: French lawmakers recently backed a 31.4% tax on crypto-to-stablecoin swaps, reflecting growing government interest in managing the boundary between fiat deposits and digital-dollar instruments.
The per-standard-deviation reduction in the paper's ordinary-least-squares estimate is about 3.75 percentage points, suggesting that even moderate shifts in the deposit-rate environment can produce meaningful changes in stablecoin growth trajectories. Banks, in other words, hold a passive but measurable lever over the pace of dollar-stablecoin expansion without needing to take any direct action in digital-asset markets.
Ahmed and Aldasoro are careful to limit what the paper establishes. Their analysis concerns asset allocation, specifically the reallocation of savings between deposits and stablecoins, and does not demonstrate that stablecoin growth reduces aggregate bank deposits or lending. The paper should not be read as evidence of bank disintermediation.
That distinction matters for regulatory framing. Policymakers weighing stablecoin legislation, including efforts to clarify reserve and issuance requirements, should note that the BIS study identifies a rate-sensitivity effect rather than a systemic funding risk. Settlement infrastructure questions, of the kind being explored in Japan's blockchain-based instant-settlement initiative for stocks and bonds, sit in a separate policy lane from the deposit-substitution dynamic the BIS paper examines.
The study leaves open whether the relationship identified in US data holds across other jurisdictions or under different monetary-policy regimes. It also does not address whether the effect would persist if stablecoins gained broader acceptance as payment instruments rather than yield-seeking savings vehicles. Those remain questions for follow-on research.
For Bitcoin's monetary properties, the finding reinforces a structural argument: Bitcoin, unlike dollar stablecoins, has no deposit-rate analogue that could slow its issuance. Its supply schedule is fixed by protocol, its difficulty adjustment operates independently of central-bank policy, and the next halving will further reduce new supply regardless of what the federal funds rate does. Stablecoin growth may ebb and flow with the rate cycle; Bitcoin's issuance curve does not.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
Bitcoininfonews first published the article titled BIS Study Examines Banks’ Role in Stablecoin Growth.
