US Deposit Rates Impact USDC and USDT Growth Differently
- A one-basis-point increase in deposit rates correlates with a reduction of approximately 4.8% in cumulative USDC growth over ten weeks.
- In contrast, the same increase leads to only 1.9% less growth for USDT.
- The study analyzed data from January 2019 to June 2025, highlighting different adoption pressures for each stablecoin.
- Overall, stablecoins show an estimated 2.8% decrease in growth per basis point of deposit repricing.
- USDC’s stronger response is attributed to its ties with institutional and decentralized finance users compared to USDT’s offshore use.
The findings indicate that higher bank deposit rates provide a financial incentive for holders to maintain balances at banks, thereby affecting stablecoin adoption dynamics differently across issuers.
This study reveals that USDC experiences a significantly larger slowdown in growth than USDT due to deposit rate increases, emphasizing the competitive landscape among financial products.(Source)
