Higher bank deposit rates slow USDC growth more than USDT, study finds
A Bank for International Settlements study links higher bank deposit rates in the United States to a larger slowdown in USDC growth than in USDT.
FTMQ Crypto, written by our newsroom0 views
Higher United States bank deposit rates reduce the growth rate of the USDC stablecoin more significantly than that of USDT, CryptoSlate and Cryptonews.net reported on October 13, citing a study released by the Bank for International Settlements. The research shows that higher bank deposit yields create a stronger financial incentive for investors to retain balances in traditional bank accounts rather than holding stablecoins. [1][2]
According to the study detailed by CryptoSlate, a single basis point increase in bank deposit rates correlates with roughly 4.8% less cumulative growth for USDC over a ten-week duration. The research indicates that bank deposit repricing shapes adoption differently for each major stablecoin issuer. [1]
CryptoSlate also noted that crypto exchange reward programs complicate forecasts for stablecoin adoption, which limits the precision of historical models. [1]
USDC is a United States dollar-pegged stablecoin issued by Circle Internet Group, distinct from a central bank digital currency. [3]
In short
- A Bank for International Settlements study links higher US bank deposit rates to slower USDC growth.
- A one-basis-point increase in deposit rates relates to 4.8% less cumulative USDC growth over ten weeks.
- USDC growth is more sensitive to deposit rate increases than USDT growth.
- USDC is a US dollar-pegged stablecoin issued by Circle Internet Group.
Sources
Every paragraph above points to the numbered items it rests on. Read the originals here.
- [1]US deposit rates choke USDC adoption, and a BIS model reveals whyCryptoSlate, 2h ago (the report this story comes from)
- [2]US deposit rates choke USDC adoption, and a BIS model reveals whyCryptonews.net, 1h ago
Background
- [3]USDC (cryptocurrency) on Wikipedia
Our newsroom writes these reports with the help of software, from the 3 sources listed and nothing else, and checks them against those sources. Facts can still be wrong or move on; the originals are the record. Spotted a mistake? Write to daniel@monsterkong.com.
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