Rising stablecoin usage may pull up to $1 trillion from emerging market banks over the next three years, as savers seek safer, more liquid alternatives to local institutions, according to Standard Chartered.
Stablecoins—cryptocurrencies pegged to assets like the U.S. dollar or gold—are gaining traction in countries with weak currencies and high inflation, including Egypt, Pakistan, Bangladesh, and Sri Lanka. They offer households and businesses a secure alternative to local banks, accelerating a post-financial-crisis shift of key banking functions into the non-bank sector.
Even without interest yields, now restricted under the U.S. GENIUS Act, stablecoins remain attractive for capital preservation. Standard Chartered forecasts the global stablecoin market will reach $2 trillion by 2028, with about two-thirds of demand coming from emerging markets.
While stablecoins threaten traditional deposits, they also enable faster payments and cheaper remittances. Regulators are responding with digital currency pilots, but banks risk a “long winter” if authorities do not adapt quickly.
