BIS Paper. https://www.bis.org/publications/working-paper-1382-are-stablecoins-and-bank-deposits-substitutes

The BIS study relies heavily on historical macro data from a period when hidden distributor- and DeFi-paid yields were widespread, making its core assumption that stablecoins act as purely zero-interest assets highly suspect. Consequently, because the authors tracked aggregate market capitalizations rather than surveying actual user behavior, the model may misattribute capital shifts and understate how severely the stablecoin sector will contract when regulatory acts enforce a true zero-yield environment.

The authors attempted to model this impact and found evidence that stablecoins and bank deposits act as partial substitutes, showing that higher bank deposit rates predict slower stablecoin growth. The negative relationship stronger for USDC than for USDT (due to US deposits). This suggests that bank deposit pricing can influence the size of the stablecoin sector, which could eventually impact bank funding conditions and monetary policy transmission.

Useful if you trust their models. But is any of this relevant when stablecoins now have no interest (or rewards)?