Standard Chartered warns stablecoins could drain $500 billion from U.S. bank deposits by 2028

Standard Chartered has issued a significant warning regarding the competitive threat posed by stablecoins to the U.S. commercial banking sector. The bank projects that, under scenarios of rapid adoption and clear regulatory frameworks, stablecoins could siphon approximately $500 billion in deposits from the U.S. banking system by the end of 2028.

The core mechanism driving this potential drain is the appeal of stablecoins as a superior form of transactional cash, particularly for corporate treasuries and large commercial clients. Unlike traditional deposits, well-regulated stablecoins offer 24/7 instantaneous settlement, combined with high liquidity and low volatility, making them attractive for short-term working capital and cross-border payments.

Standard Chartered analysis posits that the half-trillion-dollar outflow would primarily affect non-interest-bearing or low-interest-bearing commercial deposits. These deposits are critical low-cost funding sources for commercial banks. Should this forecast materialize, U.S. banks would face increased funding costs, potentially leading to reduced net interest margins and necessitating shifts toward more expensive wholesale funding or tighter credit conditions across the economy.

The realization of this prediction hinges significantly on the U.S. legislative environment, specifically the passage of clear federal regulation for stablecoins. Such regulation would solidify their status as a reliable and legally sanctioned alternative to traditional money market instruments and commercial bank deposits, accelerating institutional adoption.

Source: Standard Chartered warns stablecoins could drain $500 billion from U.S. bank deposits by 2028