The Banking Playbook
Real talk: banks are lowkey stressed about losing you to the stablecoin ecosystem. A new working paper from the Bank for International Settlements (BIS) suggests they actually have a secret weapon to keep you from going full degen: boring old savings account interest rates.
BIS economists Iñaki Aldasoro and Rashad Ahmed looked at U.S. data from 2019 to mid-2025 and found that when banks hike their deposit rates, stablecoin growth takes a major L. While stablecoin market caps usually jump about 15% every 10 weeks, a one-basis-point increase in savings rates drags that growth down to between 6% and 12%.
The Breakdown
How does this work? Banks usually keep interest rates super low until the federal funds rate hits about 3%, then they start moving faster to keep your cash in their vaults. The data shows this effect is way stronger for Circle’s USDC than Tether’s USDT, likely because USDC is more locked into the U.S. user base.
Before you go aping in, remember that this is just one working paper with caveats. The study looked at a time when most stablecoins weren't even paying yield to holders. This isn't financial advice, so don't get reckless with your portfolio.
Why it matters
This is a huge deal for the future of crypto policy in the U.S. Washington is currently navigating the rules for the GENIUS Act—the bill signed by President Donald Trump last year that finally gave us a regulatory framework for stablecoins. The big question for regulators right now is whether to let stablecoin issuers pay you yield or force them to keep reserves in traditional bank accounts. The banks are lobbying hard to keep the yield off the table, and the plot thickens as the industry waits for the new rules to kick in this January.
