A study by the Bank for International Settlements published on October 13, 2026 concludes that reserve-backed stablecoins and bank deposits act as partial substitutes. According to authors Rashad Ahmed and Inaki Aldasoro, a 1 basis point increase in bank deposit rates reduces stablecoin market cap growth by 3 to 9 percentage points over a 10-week window. The effect is particularly pronounced for USDC, which sees a 4.8 percentage point decline per basis point, compared to 1.9 percentage points for USDT. The sector’s market capitalization rose from under $5 billion to over $220 billion between January 2019 and June 2025. The researchers highlight a nonlinear effect above a federal funds rate of roughly 3%, at which point the gap between interest-bearing deposits and non-yielding stablecoin tokens becomes materially significant.
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