BIS paper finds stablecoins and bank deposits are partial substitutes in US data
A BIS working paper tests whether reserve-backed stablecoins compete with bank deposits for US funds. Using weekly data and an identification strategy built on how banks reprice deposits above roughly 3%, the authors measure how stablecoin market capitalisation responds to deposit rate changes. The finding matters for how far the stablecoin sector can grow and how it might touch bank funding and monetary transmission.
- Higher bank deposit rates are followed by slower stablecoin growth; the relationship is stronger for USDC than USDT.
- Identification exploits banks repricing deposits more aggressively once the federal funds rate exceeds roughly 3%; a placebo test uses non-stablecoin cryptoassets.
- The paper studies allocation between assets and does not establish that stablecoin growth reduces aggregate bank deposits or lending.
Executive summary
BIS Working Paper 1382, "Are stablecoins and bank deposits substitutes?", was published on 13 October 2026 by Rashad Ahmed and Iñaki Aldasoro. The paper tests whether reserve-backed stablecoins and bank deposits compete for users' funds by estimating how stablecoin demand…
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Source documents
https://www.bis.org/publications/working-paper-1382-are-stablecoins-and-bank-deposits-substitutesRead by Regulus 14 Oct 2026 at 20:05 UTC
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