Stablecoin Expansion May Drive $1T Outflow from Emerging Market Banks, According to Standard Chartered

Rising stablecoin adoption could pull up to $1 trillion from emerging market banks over the next three years, as savers increasingly turn to dollar-pegged digital assets for safety and liquidity, according to a report by Standard Chartered.

Stablecoins—cryptocurrencies tied to assets like the U.S. dollar or gold—offer an alternative to local banks, particularly in countries with weak currencies and high inflation, including Egypt, Pakistan, Bangladesh, and Sri Lanka. They are accelerating a post-financial-crisis shift of core banking functions into the non-bank sector.

Even without interest yields, now restricted under the U.S. GENIUS Act, stablecoins remain attractive to savers focused on capital preservation. Standard Chartered projects the global stablecoin market will reach $2 trillion by 2028, with roughly two-thirds of demand coming from emerging markets.

While stablecoins challenge traditional bank deposits, they also enable faster payments and cheaper remittances. Regulators are responding with digital currency pilots and upgraded payment systems, but banks risk a “long winter” if authorities fail to adapt quickly.