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Macro Environment

International Rates & Dollar Divergence

· Updated monthly

As of Mar 2026: EURIBOR 3M 2.03%, Germany 10Y 2.90%, Japan 10Y 2.35%, UK Gilt 10Y 4.70% — versus US 10Y 4.48%. When US 10Y yields exceed global peers, dollar-denominated instruments including stablecoins become more attractive to international holders seeking yield without local currency risk. Japan's decade of near-zero rates created structural demand for dollar yield. Data from FRED (monthly series), forward-filled to daily. Coverage from Jan 2020.

EURIBOR 3M
2.03%
Eurozone short rate
Germany 10Y
2.90%
Bund yield
Japan 10Y
2.35%
JGB yield
UK Gilt 10Y
4.70%
Gilt yield
US 10Y
4.48%
Treasury yield

Global 10Y Sovereign Yields vs Stablecoin Market Cap

Stablecoin market cap (left axis, green fill, from Jan 2018) against 10-year government bond yields for the US (grey dashed), Germany (blue), Japan (amber), and UK (purple) on the right axis. All monthly series forward-filled to daily. When the US 10Y widens above global peers, dollar yield attractiveness rises. Regime bands mark Fed policy periods.

EURIBOR 3M vs Stablecoin Market Cap

Eurozone short-term rate (EURIBOR 3M, right axis, red dashed) overlaid with stablecoin market cap (left axis, green, from Jan 2018). When EURIBOR lags SOFR, European investors face a higher incentive to hold USD stablecoins for yield. Regime bands mark Fed policy periods.

How to Read This Page
2020–2022 · Japan 10Y < 0.25%, US 10Y rising to 3%+
Japan Yield Cap — Maximum Dollar Incentive

The Bank of Japan held 10Y yields below 0.25% via yield curve control while the US 10Y rose above 3%. Japanese investors faced a near-zero domestic yield vs a rapidly rising dollar yield — structural incentive to hold USD stablecoins or dollar assets.

2022–2023 · ECB hikes from −0.5% to +4%
ECB Catch-Up — Euro Rate Normalisation

The ECB hiked aggressively in 2022–23, compressing the spread between EURIBOR and the US 10Y. As European rates rose, the relative yield advantage of USD stablecoins narrowed for European holders — a partial headwind to stablecoin demand from the Eurozone.

2024 · ECB cuts while Fed holds
Divergence Reopens — Dollar Yield Advantage Returns

The ECB began cutting rates in June 2024 ahead of the Fed. As the EURIBOR–SOFR spread widened again, dollar yield attractiveness increased — consistent with renewed stablecoin supply growth from European and global capital seeking dollar yield exposure.

UK Gilts — persistent positive spread vs Bund
UK Premium — Credit & Currency Risk

UK Gilt yields have consistently traded above German Bunds, reflecting UK-specific currency and fiscal risk premia (amplified by the 2022 Truss mini-budget). Elevated UK rates reflect economic risk, not just policy — watch for gilt spread as a stress indicator.

Methodology

EURIBOR 3M (IR3TIB01EZM156N): 3-month Euro Interbank Offered Rate, the primary Eurozone short-term benchmark. Monthly average, sourced from FRED.

Germany 10Y (IRLTLT01DEM156N): 10-year German Bund yield, the Eurozone risk-free benchmark. Monthly average from FRED.

Japan 10Y (IRLTLT01JPM156N): 10-year Japanese Government Bond (JGB) yield. Monthly average from FRED. Reflects Bank of Japan yield curve control policy through 2023.

UK Gilt 10Y (IRLTLT01GBM156N): 10-year UK government bond yield. Monthly average from FRED.

Monthly to daily conversion: All four series are monthly. Each monthly reading is forward-filled to daily — each day reflects the most recent available monthly figure. Standard practice for monthly macro overlays on daily data.

US 10Y (DGS10): Daily 10-year Treasury yield from FRED. Used as the US reference rate for apples-to-apples comparison with other 10Y sovereign bonds. See the Real Interest Rates page for US 10Y in full context.

Regime bands: FOMC policy period dates. Updated manually within one business day of policy changes.

Related Indicators
Macro Environment
SOFR & Short-Term Rates
The US rate that international yields are measured against — the dollar benchmark.
Macro Environment
Real Interest Rates
Inflation-adjusted US yield — the real return available to stablecoin holders vs risk assets.
Dollar & EM
Dollar Index (DXY)
Rate divergence drives dollar strength — the key transmission mechanism for international stablecoin demand.
Frequently Asked Questions
Why track international rates alongside stablecoins?
USD-denominated stablecoins compete with local currency instruments globally. When US rates are high relative to European or Japanese rates, dollar-denominated yield is more attractive — increasing stablecoin demand from non-US holders seeking dollar exposure and yield.
What is EURIBOR?
EURIBOR (Euro Interbank Offered Rate) is the benchmark short-term interbank lending rate in the Eurozone, analogous to SOFR for the US. The 3-month EURIBOR is used as a proxy for ECB policy transmission.
Why is Japan's 10Y yield so low historically?
The Bank of Japan maintained near-zero or negative interest rate policy and yield curve control (YCC) for over a decade. Japan's 10Y yield remained below 0.5% until 2023, when the BOJ began allowing rates to rise. This extreme divergence from US rates drove record yen weakness and offshore dollar demand.
How does rate divergence affect stablecoin demand?
Rate divergence between the US and other major economies strengthens the dollar and increases the relative yield of dollar-denominated instruments including stablecoins. Investors in low-yield jurisdictions (Japan, Eurozone 2020–22) have extra incentive to hold stablecoins for dollar yield exposure.