A recent research report from Standard Chartered points out that as stablecoins play an increasingly important role in the global payments and financial system, the US banking system is facing structural challenges. The bank warns that by the end of 2028, up to $500 billion in US bank deposits could flow into stablecoins, putting substantial pressure on the funding base and profit models of traditional banks.
Stablecoin growth is accelerating, but the risk of deposit outflows is emerging.
Standard Chartered analysts pointed out that the estimated $500 billion represents about one-third of their projected future global stablecoin market size of $2 trillion. This also equates to about half of the previously estimated $1 trillion in emerging market bank deposits that might be transferred to dollar-denominated stablecoins.
Geoffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered, said that payments, clearing, and other core banking functions are gradually shifting to blockchain-based solutions, making stablecoins no longer just investment or trading tools, but direct competitors to bank deposits.
Regulatory tug-of-war exacerbates uncertainty, which may in turn accelerate adoption.
The report also points out that the delays in the implementation of the Clarity Act on Digital Asset Markets in the United States have left the market in a state of high uncertainty. Kendrick notes that the debate surrounding the bill has evolved into a direct confrontation between large banks and the crypto industry.
He mentioned that cryptocurrency exchange Coinbase had withdrawn its support at one point because the draft bill might weaken the incentive to issue and hold stablecoins; on the other hand, the CEO of Bank of America warned that if stablecoins were allowed to pay interest, they could siphon up to $6 trillion in bank deposits.
Standard Chartered believes that once the regulatory framework is finalized and market uncertainty is eliminated, it could further accelerate the actual use and penetration of stablecoins.
Regional banks are the first to be affected.
To assess risk distribution, Standard Chartered uses the "net interest income as a percentage of total revenue" as a metric, believing this data best reflects a bank's sensitivity to deposit outflows. Since deposits are the core source of net interest margin, any long-term capital outflow will directly erode bank profits.
The analysis shows that regional banks in the United States, due to their heavy reliance on deposits to support lending, have the highest exposure; large integrated banks with more diversified business structures have a relatively moderate risk; and investment banks and securities firms are least affected because they have a lower reliance on deposit-based income.
Structural factors amplify the impact, and banks must adjust their response strategies.
The report also points out that the structure of the stablecoin ecosystem may limit the effectiveness of deposits flowing back to banks. Currently, the two major stablecoin issuers, Tether and Circle, only keep a small portion of their reserves in the banking system, meaning that even if funds are transferred to stablecoins, they may not effectively return to traditional banks.
Furthermore, Standard Chartered estimates that currently about two-thirds of stablecoin demand comes from emerging markets, with the remainder from developed markets. This is also an important basis for estimating the scale of bank deposit outflows in the United States and other developed economies.
Kendrick emphasized that the impact will not be evenly distributed, and the individual banks' responses will be crucial, including whether they adjust their funding structure or participate more actively in tokenization and blockchain financial infrastructure. In addition to deposits, the long-term risks to banks' non-interest income also warrant attention as the tokenization of physical assets accelerates.
Overall, Standard Chartered believes that stablecoins have gradually transformed from peripheral financial instruments into a core variable that could reshape the banking system, and the US banking industry is at a critical turning point where it must accelerate its adjustments.
