BIS: Stablecoins and Bank Deposits Act as Substitutes as Deposit Hikes Slow Stablecoin Growth BIS (Bank for International Settlements) working paper finds that stablecoins and bank deposits act as direct portfolio substitutes. Analyzing U.S. data, the authors show that a 1-basis-point hike in bank deposit rates cuts 10-week stablecoin market cap growth by roughly 3 percentage points (and up to ~9 percentage points under an IV approach). The substitution effect is significantly stronger for onshore-tied USDC (-4.8%) than offshore-centric USDT (-1.9%) and holds across bank CD rates and DeFi lending yields, demonstrating that traditional bank deposit pricing exerts an active drag on stablecoin growth.