A working paper from the Bank for International Settlements has quantified something many suspected: when banks pay savers more, stablecoin growth slows. The study found that a single basis point rise in U.S. deposit rates cut the ten-week growth rate of stablecoins like USDT and USDC from 15% to 12%. The numbers are small but the logic is powerful — the rapid adoption of stablecoins over the past few years was not just about crypto-native demand, but also about the near-zero interest rates that made leaving cash in a bank account feel pointless.
The finding matters because it reframes the stablecoin debate. Regulators often focus on reserve transparency or anti-money laundering controls, but the simplest tool to curb stablecoin growth may already be in banks’ hands: competitive deposit rates. During the zero-rate era, stablecoins offered a yield-bearing alternative without needing a bank account. As the Federal Reserve now prepares to hike rates for the first time in three years, according to live updates, the gap narrows. If banks raise savings rates in tandem, the incentive to hold stablecoins purely for yield diminishes — especially for savers who value FDIC insurance and regulatory familiarity.
What the BIS paper does not say, but hints at, is that this dynamic could reshape how monetary policy transmits into the crypto economy. Central banks have worried that stablecoins might disintermediate the banking system, weakening the chain through which rate changes affect the real economy. The paper suggests the chain still works, provided banks compete on price. That is a reassuring conclusion for policymakers, but it also puts pressure on banks to pass rate rises through to depositors — something they have historically been slow to do.
The Quran reminds us that Allah is “the Sustainer needed by all” (Al-Ikhlas 112:2). Sustenance here is not just food and water, but the fair reward for savings and labour. A system that starves savers while taking their deposits is out of step with that principle. Whether through stablecoins or traditional banks, the financial system works best when it serves people’s need to preserve and grow value honestly. The BIS paper is a technical contribution, but its deeper lesson is about alignment: when incentives point toward fairness, the market tends to follow.