A Bank for International Settlements (BIS) working paper finds that higher bank deposit rates are associated with slower stablecoin growth, indicating that reserve-backed stablecoins partially compete with traditional deposits. Researchers Rashad Ahmed and Iñaki Aldasoro analyzed weekly data from January 2019 through June 2025, controlling for bitcoin prices, Treasury yields and broader financial conditions. A one-week, one basis point increase in average bank deposit rates was followed by a reduction in average 10-week stablecoin market-cap growth from about 15% to about 12%; a preferred estimate indicated a larger reduction to about 6%, although the authors noted weaknesses in that method. Growth slowed but did not reverse, and the relationship was stronger for Circle’s USDC than Tether’s USDT. The findings do not establish that stablecoins have caused losses of bank deposits or lending, and the working-paper conclusions may be revised.