Standard Chartered Warns $1 Trillion Could Leave Emerging Market Banks for Stablecoins by 2028

Growing Stablecoin Adoption Signals Potential Systemic Shake-Up Across Developing Economies

TL;DR:

• Standard Chartered projects $1 trillion could exit emerging market bank deposits within three years.
• The bank forecasts global stablecoin capitalization to hit $2 trillion by 2028, with two-thirds of demand from EMs.
• Countries including Egypt, Pakistan, and Colombia face heightened exposure amid the shift toward digital dollars.

Standard Chartered has projected that an accelerating wave of stablecoin adoption could drive as much as $1 trillion out of emerging market bank deposits by 2028, potentially reshaping liquidity, monetary control, and credit access across developing economies. The report, published on October 6, 2025, estimated that the global stablecoin market capitalization could reach $2 trillion within the next three years, with roughly two-thirds of that growth emerging from developing markets. The bank’s analysts described this as a structural migration of savings, not a speculative event, reflecting how digital dollar instruments are gradually substituting for domestic currency deposits.

Current figures suggest that stablecoin “savings” in emerging economies total around $173 billion, a level the bank expects to climb to $1.22 trillion by 2028. This implies about $1.05 trillion in new inflows toward digital assets, matched by corresponding outflows from traditional banking systems. The study notes that roughly two-thirds of existing stablecoin supply is already concentrated in wallets used for savings in emerging markets, illustrating a fundamental behavioral shift toward digital dollarization.

Analysts highlighted that this transition is most pronounced in countries where local currencies have weakened or where inflation and capital controls erode trust in the banking sector. Egypt, Pakistan, Colombia, Bangladesh, and Sri Lanka were identified as the most vulnerable to deposit flight, with additional exposure flagged for Turkey, India, China, Brazil, South Africa, and Kenya. The report described stablecoins as “USD-denominated bank accounts” for users in unstable financial environments, allowing access to a more stable store of value and cross-border liquidity without the constraints of domestic intermediaries.

The study also warned of secondary effects. Reduced deposits could pressure local banks’ lending capacity, disrupt correspondent banking lines, and undercut foreign exchange revenues. Institutions may attempt to adapt by holding reserves for stablecoin issuers or by integrating stablecoin-based settlement systems into their treasury operations. Standard Chartered added that the trend may continue even without yield incentives, as users in high-inflation markets increasingly prioritize the preservation of capital over returns. “Stablecoin ownership has been more prevalent in emerging markets than in developed ones,” the report stated, “suggesting that diversification into digital dollars is already underway.”

The recently passed U.S. GENIUS Act, which restricts stablecoin issuers from paying direct yields to users, is expected to dampen yield competition but not the fundamental demand for dollar-backed tokens. Regulators in developing nations have begun responding with central bank digital currency pilots and modernized payment frameworks, yet the report cautioned that delayed adaptation could deepen systemic vulnerabilities. “Stablecoins represent lower credit risks than banks,” the analysts wrote, emphasizing that confidence in digital dollar instruments is growing faster than institutional responses to it.

While other financial institutions such as JPMorgan have issued more conservative projections—halving expected market growth to $500 billion by 2028—Standard Chartered’s assessment underscores the pace at which stablecoins are reshaping the structure of global finance. As demand for digital dollars expands, emerging market banks face a critical juncture: evolve their systems to accommodate stablecoin infrastructure or risk being bypassed entirely by a borderless alternative.

This article has been refined and enhanced by ChatGPT.