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Cyprus Banking Sector Sees Surging Loans Amid Falling Deposits in March 2025

The banking landscape in Cyprus experienced notable shifts in March 2025, as reported by the Central Bank of Cyprus (CBC). This period saw a substantial increase in loans totaling €429.9 million, contrasting sharply with a decrease of €66.3 million in deposits.

Loan Growth: A Deeper Look

March recorded a sharp increase in total loans, with a rise of €429.9 million compared to February’s modest €42.7 million increase. This hike pushed the annual loan growth rate to 3.1%, from 1.9% previously, with the total loan balance reaching €25.5 billion. Loans to Cyprus residents surged by €269.9 million, largely driven by non-financial corporations, which saw an increase of €188.6 million. Loans to households also saw an uptick of €29.8 million, signaling economic activity amidst the island’s financial environment.

Shifts in Deposit Dynamics

Conversely, total deposits experienced a net decline of €66.3 million in March, overturning February’s €498.3 million rise. This led to a deceleration in annual deposit growth, slowing to 7.1% from the previous 7.7%. While deposits from households showed a €13.6 million increase and non-financial corporations deposited an additional €400.1 million, other sectors like investment organizations and pension funds withdrew €436.1 million.

The total deposit balance ultimately stood at €55.9 billion, reflecting a complex interplay of financial forces on the island.

These developments come as Cyprus continues to bolster its financial infrastructure, with initiatives like the tourism revenue surge in February showing broader economic trends at play.

Circle Stock Rallies After Senate Endorses Stablecoin Legislation

Shares of Circle surged on Friday, echoing the optimism sparked by the Senate’s approval of the GENIUS Act—a legislative measure aiming to set a robust regulatory framework for stablecoins. This unprecedented boost, following a 33% spike earlier in the week on Senate approval news, has generated significant investor enthusiasm across the market.

Market Reaction and Regulatory Momentum

Following the landmark Senate vote, Circle’s stock experienced an additional 14% gain. Now headed to the House of Representatives, the Act has ignited interest not only among crypto enthusiasts but also among traditional financial institutions. This regulatory clarity is expected to upgrade dollar payment rails and enhance liquidity, providing a springboard for adopting innovative financial technologies.

Coinbase and the Broader Crypto Ecosystem

Coinbase, another significant market player, saw its shares rise by 3%. The exchange benefits from a dual revenue stream derived from Circle’s USDC reserves, underscoring the growing interdependence between major crypto platforms. Coinbase’s model, which earns full interest on USDC held on its own platform, illustrates the evolving interplay between traditional finance and digital currency innovations.

Stablecoin Surge and Future Opportunities

Stablecoins, once primarily used as bridge currencies for traders, are emerging as key elements in major financial reforms. With giants like Amazon, Walmart, Uber, Apple, and Airbnb exploring stablecoin integration, the technology holds potential to deliver faster, cost-effective payment solutions on a global scale. The GENIUS Act, in particular, is positioned to bolster consumer protections while providing a transparent pathway for traditional finance to transition onto public blockchains.

Investors Take Notice

Analysts note that the GENIUS Act could significantly enhance settlement speeds, transparency and the overall demand for U.S. debt by aligning regulatory oversight with market innovation. As Circle’s shares are on track to finish the week with a remarkable 58% gain—and an astounding 500% increase since its IPO—the market is closely watching how these regulatory advances might drive broader adoption across crypto and decentralized finance sectors.

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