Stablecoin market growth and sensitivity to interbank lending rates: Projections for wholesale CBDC adoption

This paper investigates the sensitivities of the stablecoin market by analysing daily data using a set of widely recognised financial indicators. Focusing on Tether and USD Coin (USDC), which together account for approximately 90 percent of the stablecoin market capitalisation, we find that the two coins respond differently to macro-financial conditions. Tether appears to be influenced by a broader range of indicators, while USDC shows pronounced sensitivity to the Secured Overnight Financing Rate (SOFR). These behavioural differences likely reflect variations in collateral composition, market integration, and the internal reserve management practices of the issuers. Using non-linear analytical methods, including quantile regression and decision tree models, we assess the distinct dynamic relationships between stablecoin value and key financial indicators. Based on these findings, we can support a framework for wholesale central bank digital currencies (wCBDCs) that can enhance the effectiveness of monetary policy transmission or respond more flexibly during liquidity shocks.