Higher Savings Rates Could Slow Stablecoin Growth, BIS Study Warns
Banks could slow stablecoin growth by paying savers more, BIS paper finds
Banks may be able to slow the growth of stablecoins by offering savers more attractive returns on traditional deposits, according to a paper from the Bank for International Settlements (BIS).
The finding points to the role that bank deposit rates can play in competition between commercial bank accounts and stablecoins. If savers receive higher returns from banks, the incentive to move funds into stablecoins could be reduced.
Stablecoins are digital tokens designed to maintain a stable value, typically against a fiat currency. Their use has expanded as digital assets have become more integrated into payments and financial markets, increasing their importance for banks and policymakers.
The BIS paper suggests that banks’ pricing decisions could therefore influence the pace of stablecoin adoption. Paying more to depositors would give banks a direct way to make traditional savings products more competitive.
The issue matters because the growth of stablecoins can affect how money moves through the financial system. The BIS finding places the relationship between bank deposits and digital currencies partly within the broader competition for savers’ funds.
