Wu Blockchain has learned that the latest working paper from the Bank for International Settlements (BIS) points out a clear asset substitution effect between stablecoins and bank deposits: U.S. weekly empirical data shows that for every 1 basis point increase in bank deposit interest rates, the 10-week cumulative market cap growth rate of stablecoins decreases by about 3 percentage points (amplified to about 9 percentage points under the instrumental variable method). This substitution effect is much stronger for USDC (-4.8%), which is more closely tied to the U.S., compared to the offshore-dominated USDT (-1.9%). The effect also holds true in scenarios involving certificates of deposit (CDs) and DeFi lending, indicating that bank deposit pricing can directly constrain the growth pace of stablecoins. https://www.(wublock123.com)/news/bis-stablecoins-substitute-for-bank-deposits-rate-hikes-curb-growth-70260