USDC faces bank-rate pressure – Can Visa’s payments push offset it?

Even a tiny rise in bank deposit rates could slow stablecoin growth significantly. According to a recent study by the Bank for International Settlements (BIS), a one basis point increase in bank interest rates reduces the growth in market capitalization of stablecoins by about 3% over ten weeks. Given that the overall growth is at approximately 15% annually, this decrease would reduce the amount of growth to be approximately 12% annually. USD Coin [USDC] shows greater sensitivity, with growth declining 4.8 percentage points, compared with USDT’s 1.9-point reduction. This difference highlights USDC’s closer ties to U.S. users and institutions. Moreover, higher bank yields make deposits more attractive relative to stablecoins. Yet, the effect remains specific to stablecoins, as researchers found no significant link with other cryptocurrencies.

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