Standard Chartered warns stablecoins may drain US deposits

Standard Chartered has warned that accelerating stablecoin adoption could pull as much as $500 billion from US bank deposits by the end of 2028, posing a structural risk to the banking system.

The bank said the estimate represents around one-third of a projected $2 trillion stablecoin market and reflects growing migration of payments and savings toward blockchain-based alternatives.

“This issue has pitted big banks against Coinbase,”

Wrote Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, citing regulatory delays and tensions around the US Digital Asset Market Clarity Act.

Standard Chartered said US regional banks are the most exposed because they rely heavily on deposit-funded net interest margin income, which would come under pressure if deposits shift to stablecoins.

Diversified banks face more moderate risk, while investment banks and brokerages are least exposed due to their lower dependence on traditional deposits, according to the analysis.

The report also noted that major stablecoin issuers such as Tether and Circle hold only a small share of reserves in bank deposits, limiting any recycling of funds back into the banking system.

US dollar stablecoins currently have a supply of about $300 billion, and Standard Chartered said the market could nearly triple by 2028 if its projections materialise.