Banks could slow stablecoin growth by paying savers more, BIS paper finds

The Bank for International Settlements has released findings showing that traditional banking competition significantly impacts the stablecoin ecosystem. According to the study, even a small increase in bank deposit rates can lead to a measurable decline in stablecoin adoption. This suggests that stablecoins are often used as a yield-seeking alternative when traditional banking returns are low. As banks adjust their rates to attract savers, the liquidity flowing into digital assets may diminish. This dynamic highlights the ongoing competition for capital between decentralized finance and the traditional banking sector. The research underscores the sensitivity of the crypto market to broader macroeconomic interest rate shifts.