Will stablecoins drain $500 billion from U.S. banks — or just redraw where deposits live? A fresh warning from Standard Chartered has reignited tensions between crypto firms and traditional banks: the bank’s digital-assets team says growing stablecoin use could trigger as much as $500 billion in U.S. bank deposit outflows by 2028 as payments and other banking functions move on-chain. Geoffrey Kendrick, Standard Chartered’s head of digital asset research, argues the shift is structural — and part of a broader boom he expects to push the global stablecoin market toward $2 trillion within the same timeframe, including roughly $1 trillion of demand coming from emerging markets. Key figures - Standard Chartered projection: up to $500 billion in U.S. deposit outflows by 2028. - Long-term stablecoin market forecast: up to $2 trillion; $1 trillion of that from emerging markets. - Current stablecoin market cap: just above $300 billion. Pushback from crypto research Galaxy’s head of research, Alex Thorn, dismissed the “deposit flight” framing. Thorn argues stablecoins will function similarly to money market funds: dollars leave bank savings accounts, flow into an intermediary that buys treasuries, and the cash ultimately cycles back into the banking system when sellers park proceeds. In other words, he says, it’s less a sudden flight and more a migration — with only banks that fail to offer competitive services at real risk of losing customers. Who’s most exposed? Standard Chartered’s analysis flags regional banks — which rely heavily on deposit-funded lending for interest income — as the most vulnerable. Larger diversified and investment banks, which depend less on interest income, are considered to face only moderate to low risk from stablecoin-driven deposit shifts. Politics and policy at stake The debate goes beyond balance sheets. Disagreements over stablecoin yields and their implications for banks have become a sticking point in negotiations over the U.S. crypto market-structure bill. The White House reportedly urged the parties to find a compromise so the bill can advance out of committee, but as of this report no public resolution has emerged. Bottom line The competing narratives — a structural threat to bank deposits versus an orderly migration of capital that ultimately stays in the financial system — frame a critical policy and market debate. How regulators, banks and crypto firms reconcile those views will shape both the future of stablecoin adoption and the banking landscape over the next several years. Disclaimer: This content is informational and not investment advice. Trading or investing in cryptocurrencies involves high risk; readers should do their own research before making decisions. Source: AMBCrypto. © 2026 AMBCrypto Read more AI-generated news on: undefined/news

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