Standard Chartered has warned that up to $500 billion in deposits could shift from U.S. banks to stablecoins by 2028. This is not an immediate stress scenario, but rather a structural trend in liquidity management.

According to Geoffrey Kendrick, Head of Global Digital Assets Research at the bank, the impact would be disproportionate on regional banks, whose model heavily relies on the Net Interest Margin (NIM). In many cases, the NIM accounts for more than 60% of revenues. A sustained erosion of deposits directly pressures profitability.

Stablecoins: from crypto instrument to digital liquidity cover

Stablecoins are evolving from trading tools to quasi-monetary liquidity instruments:

  • Near-instant settlement

  • Global transfers 24/7

  • Possible yield generation depending on regulatory framework

Here, the regulatory discussion —including the CLARITY Act— is key. If non-bank entities are allowed to offer yield on stablecoins, the incentive to keep liquidity outside the traditional banking system would structurally increase.

The critical point: where reserves are held

The real impact depends less on the use of stablecoins and more on the composition of their reserves:

  • If issuers maintain reserves as bank deposits, systemic damage is limited.

  • However, major issuers (e.g., Circle, Tether) predominantly hold reserves in Treasuries and money market assets, not in deposits.

This implies that a migration of deposits towards stablecoins may translate into a direct liquidity transfer from banks to the Treasury, bypassing the traditional banking system.

Competition or coexistence?

From the perspective of issuers like Circle, stablecoins complement banks.

From a macro perspective, the potential magnitude of the shift suggests that some degree of competition is inevitable, especially for banks with undiversified models.

Conclusion

This is not a 'crypto bank run'.

It is the emergence of a functional alternative to bank cash, driven by operational efficiency and regulatory changes.

Money is not leaving the financial system.

It is changing lanes.

Banks that do not adapt their value proposition in payments, liquidity, and yield will face increasing pressure in the coming years.

#stablecoin #USBanks #MarketStructureShift #DigitalMoney #MacroFinance