(3 February 2026 – United States) Standard Chartered projects stablecoins could extract US$500 billion in deposits from US banks by the end of 2028.
The analysis focuses on net interest margin (NIM) income, representing the difference between what a bank earns on loans and what it pays out on deposits.
Stablecoin issuers are prohibited from paying interest on cryptocurrencies but banks are concerned of a loophole that would allow for third parties such as crypto exchanges to pay yield on tokens, creating new competition for deposits.
“US banks face a threat as payment networks and other core banking activities shift to stablecoins. Regional US banks would be most exposed to a loss in deposits due to stablecoins” commented Standard Chartered Global Head of Digital Assets Research, Geoff Kendrick.
“The two largest stablecoin issuers, Tether and Circle, hold most of their reserves in US Treasuries, so very little re-depositing is happening”
“The total amount of bank deposits at risk from stablecoin adoption hinges on whether issuers hold their reserves in the banking system. If stablecoin issuers keep a large share of their reserves in US banks, it would reduce the potential deposit flight.”