Stablecoins Could Drain $1 Trillion from Banks, Warns Standard Chartered
The appeal of stablecoins remains high in countries where “the return of capital matters more than the return on capital,” the bank noted.
Quick overview
- The rise of dollar-backed stablecoins could lead to $1 trillion in deposit outflows from emerging-market banks over the next few years.
- Nearly 99% of stablecoins are pegged to the U.S. dollar, making them attractive in countries with currency crises, like Argentina.
- Standard Chartered projects stablecoin savings in developing economies could grow to $1.22 trillion by 2028, despite representing only 2% of total bank deposits in vulnerable countries.
- Emerging economies are sensitive to global risk sentiment, making them prone to currency depreciations, which increases the appeal of stablecoins.
The rise of dollar-backed stablecoins — fueled by Donald Trump’s more crypto-friendly stance — could trigger up to $1 trillion in deposit outflows from emerging-market banks over the next few years, according to a new report by Standard Chartered.
Nearly 99% of stablecoins are pegged to the U.S. dollar, effectively functioning as digital dollar accounts that are increasingly attractive in countries with a history of currency crises or inflation — such as Argentina. Fore example, according to Chainalysis, crypto adoption in Latin America jumped 42.5% in 2024, driven largely by stablecoin usage.
The British bank, which has a strong footprint in developing markets, warned that both companies and individuals may prefer holding funds in stablecoin wallets rather than local bank deposits.
“We estimate around $1 trillion could exit emerging-market banks and move into stablecoins over the next three years,” the report stated.
While new U.S. crypto regulations aim to contain this trend — banning regulated stablecoin issuers from offering yields akin to bank accounts — the appeal of stablecoins remains high in countries where “the return of capital matters more than the return on capital,” the bank noted.
Standard Chartered’s Outlook
The report projects that stablecoin savings in developing economies could reach $1.22 trillion by 2028, up from $173 billion today.
Though substantial, that figure would represent just 2% of total bank deposits in the 16 countries most vulnerable to such capital flight, including Egypt, Pakistan, Bangladesh, Sri Lanka, Kenya, Morocco, Turkey, India, China, Brazil, and South Africa.
“Many of these economies — except China — face twin deficits and are highly sensitive to global risk sentiment, making them prone to sharp currency depreciations,” the report concluded.
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