Core Viewpoint - The dominance of traditional bank deposits as a safe haven is being challenged by the rise of dollar-pegged stablecoins, posing a structural risk to banks globally [2][4]. Group 1: Impact on Bank Deposits - Standard Chartered estimates that U.S. bank deposits could decrease by one-third of the stablecoin market cap, which is currently around $301 billion, indicating a potential outflow of tens of billions of dollars from the banking system [4]. - If the stablecoin market grows to approximately $2 trillion, banks in developed economies could see around $500 billion in deposits leave by the end of 2028, while emerging-market banks could lose close to $1 trillion during the same period [5]. Group 2: Stablecoin Demand and Market Dynamics - Approximately two-thirds of stablecoin demand originates from emerging markets, with one-third from developed markets [5]. - The yield on stablecoins has become a contentious issue, with banks arguing that it could lead to a significant outflow of deposits and increased risks of bank runs, while the crypto community claims that stablecoins already generate yield through reserves and market activities [6]. Group 3: Legislative Context - The debate surrounding stablecoins has intensified with proposed U.S. legislation like the CLARITY Act, which has faced opposition from exchanges like Coinbase, arguing that such restrictions would hinder innovation and institutional adoption [7]. - Bank of America CEO Brian Moynihan has warned that up to $6 trillion in bank deposits could transition to stablecoins, representing about 30-35% of total commercial bank deposits in the U.S. [8].
Standard Chartered warns of $500 billion threat to banks