# Banks Can Slow Stablecoin Growth by Paying Depositors More

> Banks may slow stablecoin growth by raising deposit rates, BIS paper finds.
- Title: Banks Can Slow Stablecoin Growth by Paying Depositors More
- Summary: Banks may slow stablecoin growth by raising deposit rates, BIS paper finds. Banks can reduce stablecoin growth by increasing deposit rates, according to a…
- Keywords: banking, stablecoins, deposit rates, bis, usdc, usdt, federal reserve, deposit pricing, business, finance, Banks, Slow
- Source: Pymnts — https://pymnts.com/news/banking/2026/banks-can-slow-stablecoin-growth-by-paying-depositors-more-bis-paper-finds
- Author: PYMNTS
- Published: 2026-10-19T16:20:15+00:00
- Read time: 1 min
- Topics: banking, stablecoins, deposit rates, bis, usdc, usdt, federal reserve, deposit pricing, business, finance
## BIS Paper Finds
Banks can slow stablecoin growth by raising deposit rates, BIS paper finds.
## Higher Deposit Rates Predict Slower Growth
A one-basis-point increase in deposit interest rates reduced stablecoin growth by three percentage points, to about 12%.
## Stablecoin Market Growth
Stablecoin market capitalization grew by an average of 15% over a 10-week period in their sample.
## USDC vs USDT Competition
The relationship was stronger for Circle’s USDC than Tether’s USDT, consistent with USDC’s closer connections to U.S. institutional users.
## Banks Retain Influence
Banks retain some influence over the pace of stablecoin adoption through deposit pricing, the paper concludes.
## Policy Implications
Regulators should consider whether issuers may pay holders yield and the trade-offs involved in requiring issuers to maintain some reserves in bank deposits.
## Key takeaway

Banks can reduce stablecoin growth by increasing deposit rates, according to a BIS working paper.