TL;DR
- Accelerating stablecoin adoption could redirect up to $500B from U.S. bank deposits by 2028, according to Standard Chartered.
- Regional banks are the most exposed due to their dependence on deposit-funded income.
- From a pro-crypto perspective, the report reflects a structural shift toward blockchain-based financial infrastructure, as stablecoins gain relevance in payments, savings, and global dollar access beyond traditional banking rails.
The rapid expansion of dollar-backed stablecoins is reshaping the balance between traditional banking and blockchain finance. A recent report from Standard Chartered estimates that up to $500B could migrate from U.S. bank deposits into stablecoins by 2028, signaling a structural evolution rather than a temporary disruption. As digital payments and tokenized finance mature, stablecoins increasingly operate as a parallel layer of monetary infrastructure.
Stablecoins And The $500B Deposit Shift
Standard Chartered projects the stablecoin market approaching $2T by the end of the decade, with roughly one-third of that growth linked to U.S. bank deposits. Geoffrey Kendrick, the bank’s global head of digital assets research, connects this trend to the migration of core financial activity toward blockchain-based systems. Stablecoins already enable faster settlement, continuous availability, and lower transaction costs, particularly for cross-border payments.
From a crypto-positive standpoint, deposit outflows reflect user choice rather than financial stress. Individuals and businesses increasingly favor programmable digital dollars that move globally with fewer intermediaries. Kendrick also points to regulatory uncertainty in the U.S., noting that delayed clarity has slowed institutional alignment, while clearer rules could accelerate adoption once finalized.
US Banks Face Structural Competition From Stablecoins
The report finds that U.S. regional banks face the highest exposure because deposits are central to their net interest margin income. Diversified banks show moderate resilience, while investment banks and brokerages appear less affected due to limited reliance on deposits. This uneven exposure suggests competitive pressure rather than systemic failure, with adaptability emerging as a key factor.
Policy debates in Washington underline this divide. Some bank executives warn that interest-bearing stablecoins could attract trillions in deposits, while crypto firms argue that stablecoins strengthen the global role of the U.S. dollar. The discussion highlights how digital dollars now compete directly with traditional accounts for liquidity.
Global Demand And A Pro Crypto Outlook
Around two-thirds of stablecoin demand originates in emerging markets, where access to reliable dollar instruments remains limited. This demand reinforces USD stablecoins as global settlement tools, not niche crypto products. Major issuers like Tether and Circle hold most reserves in short-term government securities, limiting the flow of funds back into commercial banks.
