Rising stablecoin usage could siphon up to $1 trillion from emerging market banks over the next three years, as savers turn to dollar-pegged digital assets for safety and liquidity, according to a report from Standard Chartered.
Stablecoins—cryptocurrencies tied to assets such as the U.S. dollar or gold—offer households and businesses in developing economies an alternative to local banks. Adoption has been strongest in countries with weak currencies and high inflation, including Egypt, Pakistan, Bangladesh, and Sri Lanka, where deposit flight risks are pronounced.
Even without yielding interest, now restricted under the U.S. GENIUS Act, stablecoins remain appealing to users 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 pose a threat to traditional deposits, they also provide faster payments and lower remittance costs. Regulators in many emerging markets are piloting digital currencies and upgrading payment systems, but the report cautions that banks risk a “long winter” if authorities fail to adapt.
