Standard Chartered "Stablecoin proliferation could lead to up to US$1 trillion outflows from emerging-market banks"

Standard Chartered warned that the spread of stablecoins over the next 3 years could lead to up to US$1 trillion of funds flowing out of emerging-market banks. The report analyzed that dollar-pegged digital assets are positioning themselves as a 'safe-haven alternative' for depositors in emerging markets suffering from high inflation and currency instability.

On the 6th (local time), according to CoinDesk, Standard Chartered said in the report, "Stablecoins provide households and firms with a means to replace local banks and are accelerating a post-financial-crisis trend of deposit withdrawals," adding, "As a result, up to US$1 trillion could flow out of emerging-market banks over the next 3 years."

In particular, the use of stablecoins is surging in countries with unstable currencies such as Egypt, Pakistan, Bangladesh and Sri Lanka, increasing the risk of deposit outflows. The report added, "Although the U.S. 'GENIUS Act' bans interest payments on stablecoin deposit products, investors in emerging markets who prioritize capital preservation still prefer stablecoins."

Standard Chartered forecast that the global stablecoin market could reach US$2 trillion by 2028, and that about two-thirds of that would originate in emerging markets. It warned, "If regulators in each country fail to respond quickly to the changes, the 'summer' of stablecoins could turn into a long winter for emerging-market banking sectors."