Standard Chartered warns stablecoins threaten global and US bank deposits as regulatory delays accelerate adoption and pressure traditional banking models.
Standard Chartered has warned that stablecoins are increasingly threatening bank deposits globally and within the United States, according to a new analyst report. The bank said regulatory delays are adding to worries that there is increasing structural pressure from digital assets on traditional banking models.
Stablecoins Challenge Bank Funding as Regulations Lag
According to the report, the delayed US CLARITY Act has highlighted growing risks for banks as stablecoins grow. The bill aims to put an interest ban on stablecoin holdings but its delay shows the regulatory uncertainty over digital payment instruments.
Stablecoins are a real threat to bank deposits, says Standard Chartered
Stablecoin growth could drain bank deposits, with regional US banks most exposed, @StanChart's Geoff Kendrick warned.https://t.co/wy10a8D01Y
— Helen Partz (@coindanslecoin) January 27, 2026
Standard Chartered’s global head of digital assets research Geoff Kendrick said stablecoins pose a direct challenge to bank deposits. He estimated that US bank deposits could be down by a third of the stablecoin market capitalization.
Currently, the $301.4 billion market for US dollar-pegged stablecoins is based on CoinGecko data. As a result, continued growth in the market could materially reduce deposit bases across regulated financial institutions.
Standard Chartered’s previous research, published in October 2025, underlined more general risks across the rest of the world. That analysis projected up to $1 trillion could flow out of the emerging market bank deposits by the end of 2028.
Emerging Markets Face Intensifying Stablecoin Pressure
The $1 trillion outflow projected by the bank is being characterized as a structural movement out of traditional banking. Blockchain-based alternatives are coming to be seen as more stable stores of value in unstable economic climates.
The report says that countries with high inflation rates and weak local currencies are most at risk. These include Egypt, Pakistan, Bangladesh, Colombia and Sri Lanka.
In these markets, dollar-backed stablecoins are increasingly being used to preserve capital. Consumers and corporations are becoming their users as alternatives to local currency deposit accounts.
Standard Chartered also put the global stablecoin market at almost $2 trillion by 2028. A large portion of this growth will come from emerging market demand.
Although the $1 trillion outflow, while representing only about 2 percent of total deposits in high-risk countries, the impact could be severe. Even modest shifts could put pressure on bank funding models and liquidity conditions.
Meanwhile, regulatory efforts, such as the US GENIUS Act strive to offer more clarity in the oversight of stablecoins. However, adoption is still continuing despite expectation of tighter compliance.
Some analysts believe that local currency stablecoins can coexist with conventional banking systems. At the same time, central banks are speeding up CBDC development and payment infrastructure upgrades.
Standard Chartered warned that a failure to adapt swiftly could increase financial stress. Without timely reforms, emerging markets banks could be faced with a structural weakness for a long period of time.