Bank deposit rates may slow stablecoin growth

Bank rates can influence stablecoins. A working paper published in October 2026 by the Bank for International Settlements examines this competition in the United States. Rashad Ahmed and Iñaki Aldasoro link better deposit remuneration with slower token expansion without demonstrating that these assets disappear.

A measured relationship with limitations

The researchers examine weekly data from January 2019 to June 2025. Their simple estimate associates a deposit-rate increase of one basis point, or 0.01 percentage point, with approximately three points less growth over ten weeks. Average observed growth was close to 15%: this is a slowdown rather than a contraction.

The effect appears more pronounced for USDC than USDT. An alternative method produces a larger result but must be interpreted cautiously. The research presented in this working paper is not a forecast: historical relationships do not promise that a given rate increase will produce the same outcome everywhere.

Money can change routes without disappearing

A Federal Reserve research note dated 17 December 2025 helps explain why competition cannot be reduced to an amount permanently leaving banks. When a customer buys stablecoins, the issuer may retain part of the reserves as bank deposits. The funds then reappear within the system, but in a company's accounts rather than those of numerous individuals.

This transformation changes the nature of funding. A few large balances can be more concentrated and more sensitive to redemption requests than deposits dispersed among retail customers. The note therefore describes possible additional liquidity needs. Conversely, foreign demand for dollar stablecoins can bring resources to US banks. The funds' origin and the investment of reserves are consequently decisive.

Yield alone does not explain uses

A bank can defend certain deposits by paying more interest, but this response raises its own funding cost. The Federal Reserve notably discusses offers targeted at customers likely to switch services. It also examines competition from tokenised deposits. Institutions may therefore seek to combine their existing banking relationship with digital features rather than responding solely through a general increase in interest paid.

The Fed note also considers adaptation through instant payments and partnerships. A bank may provide settlement accounts or infrastructure behind a digital service marketed by a third party. In this scenario, stablecoins create new banking roles as well as competing with certain existing services. Effects therefore vary with institutions' size, funding and technological investments. These remain scenarios set out by a researcher rather than monetary policy decisions announced by the US central bank.

For Nexorena, this research invites a distinction between two questions: why hold a stablecoin and why use it for payment? A yield difference may influence the first without eliminating the interest in a programmable transfer. The BIS study sheds light on competition for savings; it does not, on its own, demonstrate a decline in bank lending. Changes in uses and reserves will remain essential for measuring the actual effects of this competition. Historical estimates, possible banking responses and the effects subsequently observed must therefore continue to be distinguished when interpreting these publications.