• BIS Working Paper 1382 treats stablecoins and bank deposits as partial substitutes, not perfect ones.
• In the authors' baseline, a one-basis-point rise in average U.S. deposit rates, held for a week, cut average ten-week stablecoin growth from about 15% to about 12%.
• The authors' preferred estimate, which adjusts for banks raising rates in response to stablecoin growth, implies an effect about three times larger, with growth near 6%, though they flag weaknesses in the method.
• Growth slowed but did not reverse, and the paper does not show actual deposit or lending losses at banks.
• The result rests on one high-rate period, and yield-bearing stablecoins or tokenized money market funds could change it.

Deposit pricing is a lever banks hold over stablecoin adoption, but a weak one. A Bank for International Settlements working paper, reported by CoinDesk on 14 October 2026, finds that when U.S. banks pay savers more, stablecoin market capitalization grows more slowly. It does not shrink. For challenger banks and payment firms in the Gulf and elsewhere, the result frames stablecoins as a pricing competitor to deposits, not an inevitable drain.

What the paper measured

The paper uses weekly data from January 2019 to June 2025, controlling for bitcoin prices, Treasury yields and broader financial conditions, according to CoinDesk's account. In the baseline, a one-basis-point rise in average U.S. deposit rates, sustained for a week, predicted slower stablecoin growth: average ten-week growth in market capitalization fell from about 15% to about 12%. The authors treat deposits and stablecoins as partial substitutes, which is the structural claim everything else rests on.

Why the preferred estimate is larger but less certain

The authors' preferred estimate adjusts for a feedback loop: banks may raise deposit rates because stablecoins are growing, which would mask the true effect in a simple comparison. Correcting for that implies an effect about three times larger, with growth near 6%. The authors themselves noted some weakness in this method, so the 12% baseline and the 6% figure are best read as a range, not a point estimate.

Where the effect is strongest

The effect was stronger for USDC than for USDT, which CoinDesk reports the authors linked to USDC's closer ties to U.S. users. The implication is structural: stablecoins whose holders are also U.S. depositors compete directly with bank balances, while those used mainly offshore respond less to domestic deposit rates. Which stablecoin a market uses therefore matters for how much deposit pricing can influence adoption.

What the paper does not show

The paper does not show actual losses of bank deposits or lending, according to CoinDesk, and its sample covers a single high-rate period. Yield-bearing stablecoins and tokenized money market funds could change the picture, since they let holders earn a return without leaving the token wrapper. A companion BIS paper, Working Paper 1363, models a bank lending channel in which wide stablecoin adoption lowers the liquidity premium banks earn on deposits.

What this means for banks and challengers

Deposit pricing is a defensive tool with a cost: paying savers more compresses net interest margin, which is the core of challenger economics. Compliance and treasury teams should treat the paper as evidence that rate competition works at the margin, not as proof it is worth the expense. Watch for regulatory treatment of stablecoin-related yields, which would decide whether the substitution gap widens or closes.