Standard Chartered projects that as much as $1 trillion could move out of emerging market (EM) bank deposits and into stablecoins over the next three years, a sign that digital dollars are becoming an increasingly attractive alternative to traditional banking in developing economies.
The British bank’s analysts say that stablecoins are functioning more like “USD-based bank accounts” for users in countries facing currency volatility, capital restrictions, or limited access to reliable banking.
According to Geoffrey Kendrick, the bank’s Global Head of Digital Assets Research, and Madhur Jha, Global Economist and Head of Thematic Research, the appeal of stablecoins lies in their accessibility and perceived safety rather than in yield opportunities.
Even with new U.S. regulations such as the GENIUS Act, which bars compliant issuers from offering direct interest, the pair argue that “return of capital matters more than return on capital” for many EM savers seeking stability.
A Trillion-Dollar Shift Taking Shape
Standard Chartered forecasts that the global stablecoin market could hit $2 trillion by the end of 2028, aligning with projections cited by the U.S. Treasury. Of today’s roughly $300 billion market, the bank estimates around two-thirds already act as savings vehicles within emerging market economies.
The report suggests that EM “savings” held in stablecoins could surge from approximately $173 billion today to $1.22 trillion within three years. That would imply over $1 trillion in potential outflows from EM bank deposits, a shift that could reshape local financial systems and cross-border capital flows.
Currently, stablecoin usage tends to be concentrated among a relatively small number of wallets with large balances. However, Standard Chartered expects the next phase of growth to be characterized by wider adoption among smaller holders, reflecting growing trust in stable digital assets as a complement or substitute for traditional savings.
Emerging Markets Most at Risk
Countries such as Egypt, Pakistan, Colombia, Bangladesh, and Sri Lanka top the bank’s list of markets most exposed to a potential bank deposit exodus. Other high-risk or high-opportunity jurisdictions include Turkey, India, China, Brazil, South Africa, and Kenya, regions where demand for stable and borderless value storage continues to accelerate.
The report emphasizes that this is not a one-dimensional trend. Factors like capital controls, remittance flows, inflation levels, and the credibility of monetary authorities will determine how deeply stablecoins penetrate each market.
Standard Chartered refers to this dynamic as an “opportunity-risk continuum,” suggesting that the phenomenon will unfold unevenly across the developing world.
Implications for Banks and Policymakers
A trillion-dollar outflow would inevitably pressure emerging market banks, potentially reducing revenues from deposits, payments, and foreign exchange services.
However, the report notes that these risks could be mitigated if banks adapt. For example, by custodying stablecoin reserves, integrating tokenized dollars into treasury operations, or leveraging blockchain rails for cross-border settlements.
Governments, meanwhile, are responding with their own innovations. Many EMs are experimenting with central bank digital currencies (CBDCs), expanding instant payment systems, and promoting digital literacy to retain public trust in local financial frameworks.
The Bigger Picture
The report arrives as the stablecoin market surpasses $300 billion in capitalization, led by Tether’s USDT and Circle’s USDC, according to data from The Block.
Industry players are expanding their presence in emerging markets: Tether is developing a U.S.-compliant version dubbed USAT, Stripe is enabling companies to issue stablecoins more easily, and startups like Plasma are building new blockchains centered around stable-value assets.
At the same time, Coinbase’s Jesse Pollak has advocated for the creation of non-USD stablecoins to increase real-world use cases, a move that could distribute outflows across multiple currencies rather than concentrating them in dollars.
For now, Standard Chartered’s conclusion is clear: the stablecoin shift in emerging markets is no longer a speculative risk, it’s a base case scenario that could redefine how billions of people interact with money.
