Standard Chartered Warns Stablecoins Threaten $500bn in US Bank Deposits

Standard Chartered has warned that accelerating the adoption of stablecoins could drain as much as $500 billion from US bank deposits by the end of 2028, adding to pressure on the traditional banking system.

In a new report, the bank said the growing use of dollar-pegged digital tokens represents a structural risk for lenders, as stablecoins increasingly perform functions typically provided by banks, including payments and other core financial services.

The estimate implies that around one-third of the stablecoin market capitalization expected by the end of the decade could be funded by deposits leaving US banks. Standard Chartered forecasts the total stablecoin market will reach $2 trillion by that point.

Regional and mid-sized US banks are likely to be the most exposed to deposit outflows, according to the report. Smaller lenders tend to rely more heavily on consumer and commercial deposits as a funding source, leaving them more vulnerable as customers shift funds into stablecoins.

Standard Chartered’s analysis focused on the potential impact on banks’ net interest margin income — the spread between what lenders earn on loans and what they pay to depositors. As deposits move out of the banking system, this income stream could come under sustained pressure.

The report also warned that US banks face mounting risks as payment networks and other fundamental banking activities increasingly migrate towards stablecoin-based systems.

Stablecoin supply has already risen sharply and Standard Chartered expects that growth to accelerate further as regulation evolves, pointing to the proposed Clarity Act, which is currently making its way through Congress.