Standard Chartered: “Stablecoins could pose a tangible threat to bank deposits”

A warning has emerged that the spread of stablecoins could erode the global bank-deposit base. The analysis suggests U.S. regional banks could be hit the hardest.

According to Cointelegraph, a cryptocurrency-focused outlet, Standard Chartered (SC) said in a recent report that stablecoins could become a “tangible threat” to bank deposits. Geoff Kendrick, head of digital-asset research, said the delay in the CLARITY Act now being discussed in the U.S. “serves as a reminder that stablecoins are becoming a risk factor for banks.”

Using the roughly $301.4 billion market for dollar-pegged stablecoins as a baseline, Kendrick estimated U.S. bank deposits could decline by about one-third of stablecoins’ market capitalization. That implies deposit outflow pressure could intensify as stablecoin adoption widens.

The report pointed to net interest margin (NIM)—a key measure of bank profitability—as the primary yardstick for risk. Because deposits are a core foundation of NIM, increased stablecoin adoption could directly affect banks’ earnings structure. The analysis found U.S. regional banks are relatively more exposed than diversified financial groups or investment banks.

The composition of stablecoin issuers’ reserve assets was also cited as a risk factor. The report said bank deposits account for just 0.02% and 14.5% of reserves at Tether and Circle, respectively. Kendrick noted that even if deposits move from banks to stablecoins, there would be no net decline if issuers kept the funds deposited within the same banking system, but in practice “there is little redepositing.”

The impact also varies by where demand originates. Domestic demand directly reduces bank deposits in that country, while overseas demand does not, the report said. About two-thirds of stablecoin demand currently comes from emerging markets, with the remaining one-third estimated to come from developed markets.

Kendrick projected that if the stablecoin market expands to $2 trillion, by the end of 2028 deposit outflows could reach about $500 billion from banks in developed markets and about $1 trillion from banks in emerging markets. He added that beyond stablecoins, the growing tokenization of real-world assets could also pose a structural challenge to bank deposits.

Meanwhile, Standard Chartered still sees a high likelihood that the CLARITY Act will pass by the end of the first quarter this year. The bill includes a provision banning interest payments on stablecoin holdings and has emerged as a central flashpoint in debates over delineating roles between banks and stablecoins.