Standard Chartered has issued a stark warning that the rapid growth of stablecoins could lead to as much as $1 trillion in deposit outflows from emerging-market (EM) banks over the next three years. In a research note, the bank's Global Head of Digital Assets Research, Geoff Kendrick, and Head of Thematic Research, Madhur Jha, highlighted that stablecoins are enabling depositors to shift savings into digital dollar alternatives like USDT and USDC, effectively accessing USD-based accounts without traditional intermediaries.
The report outlines an opportunity–vulnerability continuum across 48 countries, identifying Egypt, Pakistan, Bangladesh, Sri Lanka, Turkey, India, Brazil, South Africa, and Kenya as among the most exposed to outflows. These outflows, while massive, are estimated to represent roughly 2% of aggregate deposits in high-vulnerability economies. The analysts emphasized that stablecoins' appeal lies in their role as a safe store of value, with "return of capital mattering more than return on capital," even without yield incentives.
Standard Chartered predicts that stablecoins used for savings in EMs will surge from $173 billion to $1.22 trillion by 2028, driven by factors like high inflation, weak reserves, and large remittance inflows. The bank noted that approximately two-thirds of the current stablecoin supply is already held in EM savings wallets, increasing the risk of disintermediation for local banks. Examples include Venezuela, where annual inflation exceeds 200% and stablecoins like USDT have become a medium of exchange, accounting for 9% of remittances in 2023. Similarly, in Brazil and Argentina, stablecoins comprise 60% of crypto transactions.
Industry experts, such as Matt Huang of Paradigm, describe this as a structural realignment in global finance, accelerated by the end of zero-interest-rate policies. Despite regulatory efforts like the GENIUS Act, which prohibits yield payments, adoption is expected to continue due to stablecoins' efficiency in reducing settlement friction.