Stablecoins are starting to look less like a crypto side experiment and more like a real competitor to traditional bank deposits. That is the takeaway from a recent analysis by Standard Chartered, which suggests dollar-pegged digital tokens could pull meaningful amounts of money out of the banking system, especially outside the US.
In a research note, the bank’s analysts argue that stablecoins solve a few problems ordinary bank accounts still struggle with. They let people hold dollar-linked value in digital form, send money almost instantly, and sidestep a lot of the friction that comes with legacy banking rails. That combination is particularly appealing in countries where banking access is patchy or where local currencies tend to swing wildly.
Standard Chartered estimates that the total value of stablecoins in circulation could climb past $1 trillion by 2028. If that happens, some of the money currently sitting in bank deposits, particularly across emerging markets, could shift into digital dollars instead. For banks, that is not a small issue. Deposits are a key source of funding for loans and other core activities, so any large migration of funds changes the math.
Interestingly, the report points out that stablecoins do not need to offer interest to gain traction. For many users, the priority is not yield. It is stability, dollar access, and the ability to move funds quickly. In that context, simply restricting interest-bearing features may not do much to slow adoption.
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The effects would not stop at developing economies. US banks may be better protected because of deposit insurance and stronger financial systems, but a wider move into stablecoins could still reshape global funding flows and liquidity over time.
That said, Standard Chartered does not see stablecoins replacing banks altogether. Credit creation, lending, and most forms of financial intermediation still depend on regulated institutions. What is changing, though, is how people think about where they keep their money. More users are becoming comfortable holding value outside the traditional banking system, and that is a behavioral shift banks cannot ignore.
The bigger message in the report is clear. Stablecoins have moved well beyond crypto niche status. As they become part of everyday financial activity, banks and regulators will have to adjust to a world where deposits and payments do not flow only through traditional institutions.
